The world's third largest tobacco company Japan Tobacco has had to recall 150,000 cases of its peach-flavoured soft drink after it was discovered it contained small doses of the banned substances propyl alcohol and butyl alcohol. The recal lwill cost the company close to Y500m (US$4m). The ingredients are made by Fuji Flavor, a JT subsidiary.

"The additives were used in very small amounts and they are not prohibited in the United States and Europe and have no ill health effects," the company said. "But we have decided to recall them."

The peach drink is a successful product for JT and is a blow for the company which is trying to diversify out of its mainstream tobacco business. Although it will impact very little on the financial performance, consumer confidence will be dented, at a time when public trust in the food industry is at a low.

Japanese food and beverage companies have been extra vigilant since it was discovered last month that Kyowa Perfumery and Chemical, which supplies about 600 companies, had shipped additives containing banned substances such as castor oil. About 30 companies, ranging from the KFC chicken fast-food chain to Seven-Eleven convenience store operator, have announced recalls or stopped selling certain products.