THE BOTTOM LINE
Is there any way back for Tiger Brands after listeriosis?
Immediate task is to rebuild trust in the market, while figuring out how it will claw back lost market share
Few will ever forget the panic that gripped the country after Health Minister Aaron Motsoaledi dropped the listeriosis bombshell on Sunday, March 3 2018 and confirmed that the source of the listeria outbreak strain was a ready-to-eat processed meat plant owned by Tiger Brands in Polokwane.
As retailers hurriedly removed processed meat products from shelves, Tiger Brands’ world was turned on its head. Overnight the company was the face of listeriosis. The following Monday morning, investors dumped Tiger Brands shares and R5.7bn was cut from its market capitalisation within two hours.
Motsoaledi this week declared that SA was listeriosis-free. But Tiger Brands’ response to the news has been cautious. To begin with, it does not seem to be in a hurry to reopen the four facilities it closed after the outbreak of the diseases. And contrary to its initial defensive stance, the company appears to be taking the moral high ground. It says it wants to play a leading role in driving changes in the food safety system in SA.
Perhaps it’s the realisation that this week’s announcement does not signal the end of Tiger Brands’ woes. To begin with, the firm must still deal with the class action suit. This could drag on for a long time, unless the company and the lawyers representing the victims decide to resolve the matter speedily.
The announcement, however, frees up Tiger Brands to focus on the immediate task of rebuilding trust in the market, while figuring out how it will claw back lost market share in an environment that is difficult for consumer-facing companies.