Tiger Falls as Factory Blamed for Outbreak That Killed 180

(Bloomberg) -- Tiger Brands Ltd. tumbled after the South African company’s processed meat was identified as a source of the listeriosis outbreak that’s killed 180 people and infected about 1,000.

Africa’s largest packaged food maker has been ordered to recall certain Enterprise brand ready-to-eat items and has suspended operations at two plants, while South Africans are being advised to avoid all similar processed meat products.

The listeriosis outbreak in South Africa was believed to be the largest ever of the disease linked to food poisoning, the United Nations health agency said in January. There are at least 948 confirmed cases since the start of 2017, according to the nation’s Health Minister Aaron Motsoaledi.

The government concluded, following tests, that the source of the outbreak is the Enterprise food-production facility in Polokwane in the northeast of the country, the minister told reporters Sunday. Listeriosis is a disease caused by the bacterium listeria monocytogenes and pregnant women, newborns, elderly and people with weakened immune systems are most susceptible.

Tiger Brands isn’t aware of a direct link between the deaths and its products at this stage, Chief Executive Officer Lawrence MacDougall said Monday. The company has been ordered to recall products including its Enterprise polony, a ready-to-eat form of finely ground meat, and frankfurters, but is extending the recall to the full Enterprise chilled ready-to-eat meat range.

Tiger Brands shares dropped 7.4 percent on Monday, the most since April 2000. The stock was the second-most heavily traded among members of the FTSE/JSE Africa All Shares Index.

RCL Foods Ltd., which is also suspending production and recalling some products, fell 0.5 percent.

Enterprise is a business unit within Tiger’s value-added meat product division, which contributes roughly 7 percent to revenue and 2 percent to operating profit, “so this is a small contributor,” Sumil Seeraj, an analyst at Standard Bank Group Ltd., said by phone. Tiger Brands’ other products range from dishwasher soap to peanut butter.

Precautionary Measure

RCL said it was taking the precautionary measures of suspending production of its Rainbow Polony brand and was in the process of recalling the products. An investigation of RCL’s Wolwehoek production facility is under way, after some polony products tested positive for listeria, although not the type identified as being responsible for the outbreak, the company said.

Polony products can transfer listeria from their exterior packaging to frankfurters, other sausages and similarly processed products that are typically not cooked before eating, Motsoaledi said.

Tiger Brands has upgraded testing for listeria and introduced additional hygiene monitoring since the confirmed outbreak in December 2017, the company said. It said Sunday afternoon that its tests hadn’t yet confirmed the ST6 strain, which has driven the outbreak, although further tests were being conducted. The company is upgrading cleaning and sanitation measures, it said in a statement Monday.

The product recall will cause “intangible value destruction” to the Enterprise brand, Seeraj said. “It’s going to take the consumer time to regain confidence.”

--With assistance from Thembisile Dzonzi and Hilton Shone

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net.

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Liezel Hill, John Viljoen

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