Tiger Brands to dispose its meat processing unit amid struggles to lift performance

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Tiger Brands, a South African packaged food company is exploring the sale of its processed meats business, which was temporarily closed last year following the world’s largest-ever Listeria outbreak that has negatively impacted the performance of its meat business.

The company is facing a class-action lawsuit over its role in the incident, in which a listeriosis outbreak that killed more than 200 people in South Africa was traced back to a factory run by Tiger Brands-owned Enterprise Foods.

The food producer said its Value-Added Meat Products (VAMP) division had been earmarked for review prior to that event, and that the review had concluded it was “not an ideal fit” within the portfolio, reports Reuters.

In a statement, Tiger Brands highlighted that it had started formal due diligence on Nov. 6 after receiving “several indicative offers”. It will further evaluate its options once the process is completed.

In the six months to end-March, revenues of the group slid 79% prompting an operating loss of 296 million rands (US$20.05 million) as it struggled to get back up and running following the suspension of its operations which it reopened in December 2018.

Read:  Tiger Brands’ half year earnings drop 16% on Listeriosis outbreak

The company said the prospective sale of the unit does not affect its commitment to the class action process currently underway.

It added that it had decided to close down its Deli Foods business in Nigeria following a review, as the business continued to incur losses despite efforts from management.

Operations ceased in October and all formalities relating to the closure would be completed in the next few months.

Recently South Africa set new regulations to curb the outbreak of listeriosis published by the Department of Trade and Industry giving effect to the guidelines for the processed meat industry as laid out in SANS 885.

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The new compulsory regulations, giving clear checks and balances for processed meat manufacturing, specifies the handling, preparation, processing, packaging, refrigeration, freezing, chilling and storage of processed meat products.

They cover all aspects of a manufacturing facility, from its physical structure and equipment to ingredients used, test methods and the handling, preparing, processing, producing, packaging, marking, labelling and storage of the product.

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In addition to that, they are intended to enable the inspection of processing plants.

The regulations follow an agreement between the Departments of Trade and Industry (DTI) and Departments of Health (DoH) on the final publication of the Compulsory Specification for Processed Meat Products (VC 9100).

After extensive stakeholder consultation, the regulation was gazetted on 8 August 2019, to come into effect two months from the date of publication.

The new regulations will be enforced by the National Regulator for Compulsory Specifications (NRCS), an entity reporting to the DTI.

The DTI will work with the department of agriculture, land reform and rural development (DALRRD) to coordinate the enforcement of the new regulations.

The NRCS is setting up an extensive regulatory programme of inspections throughout the country. This will enable government and industry to detect any foodborne bugs early.

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