Tiger Brands hit by violent strike, threat of legal action


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Tiger Brands recalled 20 million KOO and Hugo’s canned vegetable products in July

  • Workers at Tiger Brands’ snacks and treats division in KwaZulu-Natal have been on strike against wage increases since last week.
  • Two workers were “savagely “assaulted Thursday, said Tiger Brands CEO Noel Doyle, who said the company could get a strike ban.
  • The company reported its results on Friday, which showed lower profits due to a product recall and civil unrest in July.

Tiger Brands could go to court for an emergency ban aimed at ending a violent strike in KwaZulu-Natal, CEO Noel Doyle said.

Producer Black Cat, Tastic Rice and Jungle Oats also owns the Beacon brand in its snacks and treats division, where workers have been on strike in KwaZulu-Natal since last week.

The strike began after Tiger Brands and the African Meat Industry and Allied Trade Union (Amitu) stumbled over wage negotiations last week.

On Friday, Doyle said there were very high levels of violence and intimidation during the strike and that two workers were “savagely” assaulted on Thursday. The CEO explained that while the company will meet with the union for further discussions on Monday, it may also file a strike ban request before that, given the violence and intimidation.

“We truly respect everyone’s right to take industrial action, but the level of intimidation we’ve seen [on Thursday] is quite unacceptable and that makes the environment quite difficult and it is difficult for our management to develop contingency plans, ”he said.

Doyle added that the base double-digit increase desired by the union would challenge the underperforming company and set a precedent that would impact the entire company.

“If the strike lasts much longer it will certainly impact our ability to serve our customers and it is in a company where – while we have performed better than last year – we are still far below. of what we were in 2019 and our service levels were pretty poor, ”said Doyle.

Results

Tiger Brands released its full year results for the fiscal year ended September 30, 2021 on Friday, reporting 4% revenue growth to 31 billion rand, overall profit fell 6% to 1 127 cents per share.

The performance of the Johannesburg-headquartered group was offset by one-time costs of R732 million related to its July recall of KOO 20 million and Hugo canned vegetable products over safety concerns due to cans. potentially flawed, as well as the impact of the unrest that took place in KwaZulu-Natal and Gauteng in the same month.

The strike, product recall and unrest have added to the list of challenges the company has faced this year, including current supply chain issues facing businesses around the world, including delays and port congestion as well as high shipping costs.

Tiger Brands currently sources its products from countries such as the Far East, North America and Australia, which have been affected by supply chain issues.

“We are seeing on the export side… challenges in securing shipping niches. For us, it’s more about pushing costs, ”said Doyle.

He worries about the increase in logistics and raw material costs over the next few months.

“We are probably talking about additional inflation of 2% [price hike] just to get that back, ”he explained.

The CEO added that the company was working on business and operational training, warehouse and logistics allocation, and developing alternative sources of supply to address the issue. Alternative sources include the supply of agricultural products from southern and eastern Africa in the medium to long term.

The company declared a final ordinary dividend of 506 cents per share for the year and an interim ordinary dividend of 320 cents per share.

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