NEWS
20/03/2018 08:38 SAST | Updated 20/03/2018 08:40 SAST

Tiger Brands Sets Aside Millions For Listeriosis Class Action (But Having Insurance Helps)

The company reportedly plans to claim R94-million in insurance for the recall costs and it could lose R377-million from lost sales and the destruction of the returned items.

A couple leaves Tiger Brands factory shop in Germiston, Johannesburg, South Africa, March 5, 2018.
Siphiwe Sibeko / Reuters
A couple leaves Tiger Brands factory shop in Germiston, Johannesburg, South Africa, March 5, 2018.

Tiger Brands — owner of the Enterprise polony brand, among others — found by the department of health to be the source of the listeriosis outbreak, has set aside R425-million for a class action suit, Business Day reported. At least 1,000 people have reportedly come forward with complaints that they became sick after eating contaminated foods between May 2017 and February 2018, when Tiger Brands recalled its processed meat products.

LHL Attorneys, leading the class action suit, reportedly said the companies involved were liable for damages caused by the food products.

On Monday, Tiger Brands reportedly announced it would also be recalling its snacks, treats and beverages, which could cost it R800-million, according to Business Day. Tiger Brands reportedly said that although it had only been asked to recall its polony and Vienna products, it had decided to recall all its meat products.

The company reportedly plans to claim R94-million in insurance for the recall costs and it could lose R377-million from lost sales and the destruction of the returned items.

According to TimesLive, Tiger Brands said listeria monocytogenes were detected at its Value Added Meat Product's Pretoria facility. Its operations at Polokwane and Germiston, where it was first detected, have also closed. Operations at its Clayville abattoir which feeds the Polokwane and Clayville operations have also been suspended.

The company expects its meat products unit to record a monthly loss of R33-million, according to Reuters.

Competitor RCL Foods apparently tested positive for listeriosis but denied this, Business Day reported. However, Health Minister Aaron Motsoaledi said the products in the factory were at risk of cross-contamination.

On Monday, attorney Richard Spoor, leading the Tiger Brands class action, said that the R1.2-million compensation award to the victims of the Life Esidimeni tragedy should make Tiger Brands "very worried".