On the back foot

Finweek English Edition - - Marketplace Simon Says -

Tiger Brands’ lis­te­ria out­break cost it some R900m in the lat­est re­sults and now it has to try and claw back con­sumer trust for the prod­ucts. But there's an­other po­ten­tial prob­lem. Tiger Brands pro­duc­ers’ branded prod­ucts are gen­er­ally ei­ther first or sec­ond in their cat­e­gories, but the un­der-pres­sure con­sumer has been shop­ping down to white-la­belled prod­ucts. The ques­tion is whether con­sumers will re­turn back to the higher-priced brands. Many will, but white la­bels in South Africa are sup­ported at lower over­all lev­els than many other coun­tries and I won­der if many of these cus­tomers will stay with white la­bels (and will there­fore be lost to the brands for good). I’ve never been a fan of food-pro­duc­ing com­pa­nies as they lack pric­ing power and have in­put cost risk. Even af­ter los­ing al­most half its value this year, I would not be a buyer of Tiger Brands shares.

Even af­ter los­ing al­most half its value this year, I would not be a buyer of Tiger Brands shares.

One of Tiger Brands’ fac­to­ries in Ger­mis­ton on Gaut­eng’s East Rand.

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