SGS
Carst and Walker

A very bad year for Tiger Brands

The listeriosis tragedy was just one of a series of setbacks for Tiger Brands, which has been slow to display a conscience…

What a relief it must have been for Tiger Brands’ remuneration committee that its 2018 financial year was a truly nightmarish one.

The difficult economic conditions drove every performance measure sharply south — so it didn’t have to grapple with whether to pay bonuses in a year in which 209 customers died of listeriosis.

  • Revenue was down 9%.
  • Squeezed operating margins meant operating income slumped 28%.
  • Headline earnings were 26% lower and cash from operations was gutted.

This meant there was absolutely no chance of short-or long-term bonuses for any Tiger Brands executives. Remarkably, if there had been earnings growth, there’s nothing in the group’s remuneration policy that would have stopped the committee from paying generous rewards, despite hundreds of people dying as a result of listeriosis picked up through one of the firm’s products.

This seems particularly bizarre, given that the company’s stated purpose is to “nourish and nurture more lives every day”. And lest you forget all the nourishing and nurturing, the recently released 2018 integrated annual report frequently reminds us of the group’s “Eat well, live well” tag-line.

As anybody who tracked the slew of listeriosis-related Sens statements issued between March and December 2018 will know, communication is not one of Tiger Brands’ strengths.

The statements were tone-deaf. The worst was the mid-March 2018 announcement, seemingly drafted by lawyers with ice in their veins. Did any shareholder take comfort from the news that the expected costs of the outbreak, which ranged from R337m to R377m, and that R94m could be reclaimed from insurers?

It has to be said, given the scale of the disaster, that the chance of the company striking the right note in its annual report was always going to be slim — but to delay discussion of listeriosis until page 30 is puzzling.

This was, after all, the defining event of Tiger Brands’ year, and it looks set to haunt it for several more.

At page 30, Tiger Brands chair Khotso Mokhele begins to discuss the issue with something close to appropriate levels of compassion.

He mentions the importance of food safety and the various levels of controls in place at the group before stating: “Despite these robust controls, the country’s worst outbreak of Listeria monocytogenes was attributed to our Enterprise facility in Polokwane. This was a truly devastating development to the Tiger Brands family, including the board, the leadership and the entire staff.”

Mokhele devotes much of his commentary to the disaster. “For our products — intended to nourish and be enjoyed — to have been identified as the cause of illness and death was singularly shocking. Our hearts go out to all the individuals and families in any way affected by the listeriosis outbreak.”

Waseem Thokan, head of research at Legae Securities, says any signs of contrition have to be seen in the context of a group that had not demonstrated significant attention to food safety in previous integrated annual reports.

The latest report is the first that includes food safety as a significant risk. The group even appeared to be late in dealing with the health effects of sugar.

“This attitude is in stark contrast to emerging global trends, where major food groups have become more proactive in dealing with these existential risks,” says Thokan, who believes the successful international players place much greater focus on stakeholder inclusivity…..

Financial Mail: Read the full article here

Spread the love

Tags: , , ,

1030 Views

Latest Food Industry News!

  • Tiger Brands takes a hammering from bad news

    Tiger Brands takes a hammering from bad news This past Wednesday 12 February 2020, Tiger Brands had one of its worst days in years, with its shares finishing 6% lower on the JSE to R188 – the steepest fall since April 2011 – the day Noel Doyle presented the company’s financial results to shareholders for the first time as new CEO. New Tiger

  • Supermarkets under future threat from food delivery disruptors

    Supermarkets under future threat from food delivery disruptors Food delivery apps have are chiselling away at the restaurant industry’s market share, and upping levels of competition. The impact for supermarkets is less direct but no less a threat, as SA futurist, Jonathan Cherry, comments… A new body of research out of the UK suggests that four out of every five shoppers in the

  • Parmalat SA becomes Lactalis South Africa

    Parmalat SA becomes Lactalis South Africa Lactalis South Africa is the new name for Parmalat SA as of 1 February 2020. This is a name change only, and it will not impact the company’s existing products, brands or business operations. Parmalat SA has been been part of the international Lactalis family for the past nine years since the Lactalis Group bought

  • SA competition watchdog approves Pioneer/PepsiCo merger

    SA competition watchdog approves Pioneer/PepsiCo merger The Competition Commission has recommended that the Competition Tribunal give the green light to a R24bn deal that will see PepsiCo take over Pioneer Foods. The deal’s benefits are “significant”, the Commission said, while recommending that it be approved subject to conditions including job creation, local investment and a minimum R1.6-billion B-BBEE transaction. PepsiCo struck

  • SA plastics pact to tackle plastic waste and pollution

    SA plastics pact to tackle plastic waste and pollution Research shows that eight million tonnes of plastic leak into the ocean every year… and while the statistics are overwhelming, initiatives like the newly launched and potentially game-changing South African Plastics Pact aim to tackle the problem head on by keeping plastics in the economy and out of the environment. Launched on 30 January 2020,

  • A new tomato ideal for urban gardens and even outer space

    A new tomato ideal for urban gardens and even outer space Farmers could soon be growing bunches of tomatoes in storage units, on the roof of a skyscraper, or even in space. That’s if a clutch of new gene-edited crops prove as fruitful as the first batch. The primary goal of this new research is to engineer a wider variety of crops that can be grown

  • Symrise presents a decade of top foodbev-flavour trends

    Symrise presents a decade of top foodbev-flavour trends In celebration for the new decade, Symrise has compiled a list of the top 20 food trends that morphed the food and beverage industry over the past ten years. Over the past decade, consumers developed generational preferences and consumption habits resulting in unexpected food and beverage trends. Between 2010 and 2020, the industry saw the

  • Breakfast: history brief and why we should skip it

    Breakfast: history brief and why we should skip it Breakfast is not “the most important meal of the day”. It never has been. That old saying came from Kellogg’s cereal in 1917 as part of a marketing campaign to sell Corn Flakes. With its success, other food companies followed suit and here we are today. (The Kellogg brothers were also religious nuts who got

  • Tiger Brands’ CEO retires, CFO takes helm

    Tiger Brands’ CEO retires, CFO takes helm After a troubled tenure of only four years, the CEO of Tiger Brands, Lawrence Mac Dougall, retired on January 31, having reached the company’s mandatory retirement age of 63. Chief Financial Officer Noel Doyle takes over as CEO from February 1 and Mac Dougall, who has headed Tiger Brands since March 2016, will stay on

  • Wanted! External Sales Rep

    Wanted! External Sales Rep Jo’burg-based BCG Stainless Steel Services is a key player in hygienic fluid processing/engineering in SA – we are looking for a results-driven Sales Representative to actively penetrate the market and generate business with new and existing customers. DUTIES & RESPONSIBILITIES • Establish and maintain strong customer relationships with existing and new customers. • Provide high

Foodstuff SA

Stay informed!

Sign up for our regular newsletter, and
join over 7,000 subscribers who value this service.

Its FREE! Sign up now!

You have successfully subscribed to our mail list.

Too many subscribe attempts for this email address.

*
Food Stuff SA will use the information you provide on this form to be in touch with you and to provide updates and marketing.