Tiger admits listeria at factory

● Tiger Brands this week finally admitted that the deadly ST6 strain of listeria had been found in its Polokwane factory.

The strain has claimed the lives of almost 200 people.

The share price of the ubiquitous food manufacturer that owns dozens of brands from Energade to Tastic, slid on Thursday following the announcement late on Wednesday after the JSE had closed.

Since listeria was traced to one of its factories earlier this year, Tiger Brands has been adamant it had no connection with the outbreak. This was despite confirmation from the Centre for Enteric Diseases at the National Institute for Communicable Diseases (NICD) that it had found the strain at Tiger Brands’ Enterprise Food factory in Polokwane.

The group said a batch of one of its products tested in February initially could not be confirmed as tainted, but after Tiger had sent it to an external laboratory for further tests it received confirmation of the strain in the ready-to-eat processed meat product.

Tiger Brands CEO Lawrence MacDougall said in a statement the group was “enormously disappointed by the development”.

“We are simply devastated to learn that one of our products contained ST6. This company has existed for more than 90 years. It will not shirk its responsibilities to its customers. I can give you my personal assurance that we will leave no stone unturned to do what is right. We will continue to do the right thing, as we have endeavoured to do since news first broke,” MacDougall said.

The group share price fell by as much as 1.81% during the day on Thursday but closed flat at R387. The share price has fallen by over 15% since the start of the year.

Ashburton Investments analyst Wayne McCurrie said the announcement had already been priced into the share price.

The market was well aware that Tiger Brands carried a liability as a result of the outbreak, he said.

“I don’t think management, either the MD or the head of that division or the head of that factory or the head of Enterprise could come through this unscathed,” McCurrie said.

“There will be quite significant internal forces to almost make a statement and say, ‘Look this is what we did, we realised we have got this problem and this person, that place was responsible and look at the action we have taken’.” Action, and being seen to be taking action, “is not just the moral aspect, it’s the company’s brand aspect.”

On Thursday Richard Spoor, who is representing some of the victims seeking compensation against Tiger Brands, said he had made significant progress in joining his class action with the one LHL Attorneys is undertaking.

Spoor said the Wednesday announcement was not completely unexpected.

The NICD has been adamant that the strain had been found in the factory and that it was the source of the outbreak. Spoor said the acknowledgement by the company that its own laboratory tests had confirmed the strain was a positive sign.

A “really substantial” part of the case had been proven, he said.

“With the evidence we have got now it becomes extremely difficult for the defendants to dispute any concerned case of listeria. It’s looking very hard to imagine they could mount any cogent defence,” he said.

In March Tiger Brands said the estimated claims of both class action suits against the group could reach a total of R425-million.

The group’s spokesperson, Nevashnee Naicker, said the company had “appropriate insurance for an event such as this”.

We are simply devastated to learn one of our products contained ST6