By Ray Mahlaka
Tiger Brands, Africa’s biggest packaged-food company, plans to sell its businesses sullied by the listeriosis outbreak. Tiger Brands said any potential liability (or monetary settlement) under the ongoing class-action lawsuit – launched by human rights attorney Richard Spoor on behalf of the families of listeriosis victims – will not transfer to the new owners of the meat processing businesses.
The sale of Tiger Brands’ businesses that fall under its meat processing division, which was a major source of SA’s listeriosis outbreak nearly four years ago, came with a crucial proviso.
Tiger Brands, Africa’s biggest packaged-food company, announced on Monday 17 August that it will sell its meat processing businesses through two separate deals worth R428-million.
Molare Proprietary, one of SA’s largest piggery businesses, will buy Tiger Brands’ abattoir business at Olifantsfontein in Gauteng and associated inventories for R117-million. Meanwhile, Tiger Brands’ meat processing factories at Germiston, Polokwane, and Pretoria will be acquired by Silver Blade Abattoir Proprietary, a wholly-owned subsidiary of Country Bird Holdings, for R311-million.
The soon-to-be-sold businesses contributed to Tiger Brands’ production of ready-to-eat processed meat products under its consumer product brands such as Enterprise, Mieliekip, Renown, Bokkie and Top One.
But Tiger Brands’ announcement of the sales was repeatedly dotted with terms and conditions relating to SA’s listeriosis storm, indicating that its negotiations with potential buyers, which began in 2019, were long and hard. Tiger Brands said any potential liability (or monetary settlement) under the ongoing class-action lawsuit – launched by human rights attorney Richard Spoor on behalf of the families of listeriosis victims – will not transfer to the new owners of the meat processing businesses.
As part of the sales agreements, Tiger Brands has indemnified the purchasers against any potential liability that may arise on the conclusion of the class-action lawsuit, the company said.
Arguably, this is important for the families affected by listeriosis as Tiger Brands might still be held accountable for the outbreak – which claimed 218 lives from January 2017 to September 2018 – regardless of the company no longer owning the meat processing businesses. In other words, Tiger Brands cannot absolve itself of any responsibility even if its meat processing businesses have new owners.
The outbreak of listeriosis, a bacterial infection that is commonly transmitted by the ingestion of contaminated food products, hit SA hard.
The dead were mostly unborn children, infants infected before or during birth, and elderly people. A government-led investigation found that listeriosis had originated from a Tiger Brands factory in Polokwane, Limpopo, which produced Enterprise branded ready-to-eat processed meat products.
It was a major blow for Tiger Brands, whose products feature in grocery cupboards of many households in SA and the rest of Africa. Tiger is the manufacturer of Albany bread, Tastic rice, Purity baby food, Koo canned beans, Jungle Oats, Oros juice, Black Cat peanut butter, All Gold jam, and many other consumer goods.
The reputational damage to Tiger Brands has led to major losses for investors, who have watched the company’s share price fall by 55% since the start of the listeriosis outbreak in January 2017, wiping off R41-billion from its market value.
Tiger Brands is more reticent about the sale of the meat processing businesses, saying it was part of a strategic review initiated before the listeriosis outbreak and concluded that the businesses were “not an ideal fit within the Tiger Brands portfolio”.
Company CEO Noel Doyle has gone further, saying the sale of the businesses “as going concerns” will safeguard the jobs of 1,000 workers employed at the factories.
But some market watchers are blunter about the sale.
“The massive reputational setback suffered from the value-added meat products scandal has forced them [Tiger Brands] to dissociate completely from it. You can just imagine what [a] second round of listeriosis might mean for Tiger Brands. Not to mention more court cases and claims. This obviously leads to the buyers that are getting a bargain and the Covid-19 pandemic probably amplified this,” said Cassie Treurnicht, an analyst at Gryphon Asset Management. DM/BM