Class action news knocks Tiger Brands

Mar 12 2018 16:09
Paul Burkhardt, Bloomberg, with Fin24

Johannesburg - The share price of Tiger Brands  [JSE:TBS] dipped by more than 5% in early trade on Monday, before recovering to trade a touch over 3% down on news that South African listeriosis victims plan to file a class action case against the group. 

Richard Spoor, known in South Africa for his work for mineworkers seeking compensation for lung damage, is teaming up with Seattle-based firm Marler Clark on the listeriosis case, he said on Monday.

The suit could be brought within the next two weeks. 

The group's shares were trading down 3.3% at R355.95 at 15:46 on the JSE after reaching an intra-day low of R348.52. 

Tiger Brands’ Enterprise unit has closed two factories and recalled ready-to-eat meat products after government tests linked one of its facilities to the outbreak.

“We have instructions from a large enough group of victims and a representative group of victims” to file a suit, Spoor said by phone. “We hope to file it this week or next.”

Tiger Brands hasn’t received notification of any class action, said Nevashnee Naicker, a company spokesperson.

The Department of Health traced the outbreak, in which more than 180 people have died, to Tiger Brands’ Enterprise factory in Polokwane, in Limpopo province, and said last week it would support anyone intending legal action.

While the department showed Tiger Brands confirmation that the ST6 strain of listeria, which has been linked to the deaths, was found at the facility, tests haven’t shown the strain in the company’s products, Naicker said.

Consumer protection rules state that harm caused by a defective product can hold the distributor strictly liable, Spoor said.

“I can’t see how it would be in Tiger Brands’ interest to contest this aggressively,” he said.

Tiger Brands on Friday said that its Polokwane and Germiston factories would remain closed while it conducts a "deep cleaning process".

"Tiger Brands acknowledges that it is dealing with a national crisis which has impacted customers, consumers and the industry. Tiger Brands intends being at the forefront of finding a solution, and to this end, we have appointed a team of local and international scientific experts to attempt identify the root cause of LST6," it said. 

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Minister of Health Aaron Motsoaledi has announced that processed meat was the source of South Africa’s latest and worst listeriosis outbreak on record.

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