Ghost of listeriosis past: Tiger Brands faces multimillion-rand class action
By Sandile Mchunu - Dec 4th 2018, 13:59
The material impact of the damage to Tiger Brands could be hundreds of millions of rand, according to analysts, after the High Court granted an order certifying a class action against the food producer as a result of the listeriosis outbreak that killed 200 people early this year.
Attorney Richard Spoor and LHL Attorneys, who are acting on behalf of the different applicants in two separate listeriosis class-action lawsuits against Tiger Brands, agreed to combine their cases in August.
Tiger Brands said the applicants had been directed to give notice of the class action to members of the classes.
Tiger Brands had agreed to share the costs of advertising the class-action suit and operate a toll-free number for people who want to participate.
However, it said it was limiting these costs to R1 million.
“Such contribution is made as a gesture of goodwill and without any admission of liability,” the group said.
The group said the class action would be conducted in two stages.
Jordan Weir, a trader at Citadel, said the extent of the material impact, or damage, that the lawsuits could have on Tiger Brands was unclear.
The court order meant that Tiger Brands might have to start preparing against future lawsuits from humanitarian law firms representing the listeriosis victims and their families, he said.
“The timing and rollout of these lawsuits remains uncertain for now, but legal action could begin taking place as early as the first quarter of 2019. This would likely open the doors to further liability issues for Tiger Brands,” Weir said.
“However, should the lawsuits jointly amount to figures of greater than R1 billion, it could begin to take its toll on the company’s share price, as any figures above R1bn would start to dig into the profits and dividends of shareholders to the tune of some 10 percent."
"For now, the share’s price action remains something of a ‘wait and see’, as some of the impending lawsuits may have already been partially priced in,” he said.
The class action suit currently covers more than 1 000 people affected by the outbreak who intend to sue for damages.
Ron Klipin, a senior analyst at Cratos Capital, said Tiger Brands had already made a once-off write-off of R380m net of insurance in respect of the class action.
“It appears that each class action will be limited to a maximum claim of R1m, with applicants now able to begin with their class actions against the company, following the High Court granting an order enabling the institution of the class action against Tiger Brands,” Klipin said.
He added that, in the first instance, the respondents would be identified, and only those who followed through to the second stage would benefit if successful.
Despite the news, buoyant trading on the JSE lifted Tiger Brands’ share price 6.14 percent, before closing flat at R268. The share has declined by more than 40 percent since the outbreak earlier this year.
The group said the recall associated with its value-added meat processing amounted to R415m, but balanced at R363m, net of the R50m insurance claim, and R2m in profit from the disposal of related property in the six months to end March results. IOL
South Africans are spending less on their weekly shopping trip
23/05/2019 - 09:44
Tiger Brands, which carries brands including Koo canned foods, All Gold, and Tastic rice, said that revenue from continuing operations fell 2% to R15.4 billion in the interim period.
Tiger Brands reports lower sales in wake of the listeriosis crisis
22/05/2019 - 09:29
Tiger Brands, which was named as the culprit in the 2018 listeriosis outbreak, says sales in the six months to end-March edged lower because of a slump in processed-meat sales and weak revenues from outside SA.
Clover set to return to profit in year to June
13/05/2019 - 10:15
Clover, which makes dairy-based foods and beverages, says it will return to profit in the year ending June 2019 after making its first annual loss in more than a decade in the prior year.
Tiger Brands to fight against listeriosis class-action lawsuit
17/04/2019 - 13:02
Tiger Brands says it plans to put up a fight in a class-action lawsuit against the company relating to the deadly listeriosis outbreak of 2018.
Nederburg maker Distell lifts earnings, even as sales fall
04/03/2019 - 13:08
Distell Group, which makes Nederburg wines and Klipdrift brandies, reported a double-digit increase in earnings for the six months to December, even as sales volumes fell in SA.