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LISTERIOSIS OUTBREAK IN SOUTH AFRICA In March 2018, Tiger Brandssuspended operations at its factories in Polokwane, Germiston andPretoria, which the department of health had linked to thelisteriosis outbreak and had claimed over 200 lives in SouthAfrica, and infected over 1,000 others, mostly pregnant women,children, the elderly and people with chronic health conditionsfell ill because of the infection. Tiger Brands was thrown into thecentre of the listeriosis storm after South Africa’s NationalInstitute for Communicable Diseases announced that itsinvestigation had traced the origins of the disease to one of thecompany’s biggest meat processing plants. The culprit wasidentified as polony from the Enterprise Foods facility thatproduced a range of cold meats. Tiger Brands, a $2.5-billionJohannesburg Stock Exchange-listed business, owns Enterprise Foodsamong another continent-wide popular food brands. South Africa hasbeen struggling with the listeriosis outbreak for 14 months. Unableto find the source of the affected products, the outbreak developedinto the worst case of listeriosis in the world. By the end ofFebruary 2018, health authorities had confirmed 948 cases with 180fatalities. The repercussion was always going to be unforgiving.But Tiger Brands did not help the situation. It overlooked a numberof the accepted protocols of handling a crisis of this nature. As aresult, the company’s brand equity took a serious strain. The SAgovernment decisively responded to stop the outbreak ofListeriosis. All manufacturers were instructed to recall processed,ready-to-eat meat products; exports of such products weresuspended; the public was advised to avoid all processed,ready-to-eat meat products; the products were isolated, returned tothe stores for a refund and thorough cleaning was carried out bothat the stores and at home where they were kept. This interventionwas welcomed by all, but more decisive measures were required.Tiger Brands recalled all products across the country. At the time,it projected that the recall would cost it as much as R377 million.The costs excluded ongoing trading losses and were calculated onthe assumption that the facilities would be reopened by 30September 2018. All frozen stock tested proved negative forListeria monocytogenes. The remaining carrying value of frozenstock exposed to potential future write-offs is R80 million. Allother stock of product, raw materials, packaging and ingredients,which were expected to be utilised following a recommencement ofoperations amounted to R103 million at 31 March 2018. In March, thegroup warned that the monthly impact of a complete cessation inproduction equals an ‘adverse movement’ of approximately R50million at earnings, before interest and tax level relative to theexisting earnings base. Tiger Brands published its interimfinancial results for the six months ended March 2018, showing whateffect the devastating listeriosis outbreak had on its bottom line.The group recorded a 4% decline in revenue for the period to R15.7billion (from R16.4 billion before) while operating income (beforeimpairments and ‘abnormal items’) declined 8% to R2 billion. Therecall associated with its value-added meat processing (VAMP)amounted to R415 million but balanced at R363 million, net of theR50 million insurance claim, and R2 million in profit from thedisposal of related property. HEPS was down 16% to 868 cents, whilean interim dividend was declared at 378cps. “With the exception ofVAMP, the group’s core domestic food businesses delivered a steadyperformance in the six-month period ended 31 March 2018,notwithstanding intense competition and ongoing pressure on pricingas consumers continually search for value,” the group said.However, the R363 million blow was certainly felt, with a furtherR183 million hanging in the balance as tests for Listeria continueon remaining stock. Tiger Brands faced serious brand erosion as aresult of the way it had handled the unfolding crisis. It couldhave responded better, by being more rapid in its responses. Thecompany only held a media briefing a day after the minister’sannouncement of listeriosis.However, the Tiger Brands noted withconcern the media statement released by the Department of Healthand the National Institute of Communicable Diseases (NICD) on 4March 2018, which essentially concluded that the present outbreakwas traced to a food production facility in Polokwane whilstraising further concerns about a facility in Germiston. Theyclaimed media released was devoid of detail and this lack ofdetails resulted in misinformation which was not only detrimentalto the consumer, but also the South African Red Meat Industry. Inthis regard, the average consumer was being led into a Listeriahysteria which had unfortunate consequences for families who reliedon processed meat as their source of protein. At the outset, TigerBrands pointed out that food safety remained at the heart of theirbusiness and assured the consumer that everything possible is beingdone with the utmost urgency to ensure that consumer’s personalhealth and well-being were protected not only as a matter ofroutine but with increased vigilance. The outbreak emphasized theresponsibility of the Tiger Brands together with other foodindustries to provide for proper and improved hygiene during theproduction, processing, packing and preparation of red meat and redmeat products. However, according to Tiger Brands, during theprocessing of livestock to meat at the abattoir, particularattention is given to slaughter procedures, personal hygiene andsterilization of equipment to minimize bacterial contaminationduring this process. Furthermore, meat inspection of each animaland carcass ensure the health of the animal and removal of anypossible contamination that might have occurred. Microbiologicaltesting of water, product, contact surfaces and hands is aprerequisite at a registered abattoir in terms of the Meat SafetyAct, 2000 and supporting regulations. Whilst Tiger Brands wasresponsible for producing food that was safe for human consumption,it was also the responsibility of consumers not to contentthemselves, that the only contamination can come from thefacilities implicated, but to adopt basic hygienic practices whenbuying, transporting food home, preparing and storing food toprotect their health and to ensure that cross-contamination doesnot occur between cooked and raw products or from human hands andequipment. Listeria presents a particular concern with respect tofood handling because it can multiply at refrigerator temperatures.It is therefore imperative that consumers ensure that the meat theypurchase is sourced only from registered abattoirs that have anIndependent Meat Inspection Service and that once purchased thecold chain is maintained at all times; as well as to avoid eatingraw or undercooked meat products. The SACP called on the governmentto hold Tiger Brands accountable. They protested that heavypenalties must be imposed for the negligence that resulted in thefailure to prevent the bacteria at Tiger Brands Enterprise Foods inPolokwane, in Gauteng and elsewhere at the monopoly’s facilities,and at other companies that failed to uphold food health andsafety, Rainbow Chicken included. The union further requested thatall workers at Tiger Brands’ Enterprise Foods must receive urgentpriority for screening, paid for by the monopoly. The workers’conditions of employment, including hours of work, must be lookedinto and be addressed.
TASK: “Unfortunately, the aforesaid mediarelease is devoid of detail and this lack of detail has resulted inmisinformation which is not detrimental to the consumer. In thisregard, the average consumer is being a Listeria hysteria which ishaving unfortunate consequences for families who rely on processedmeat as their source of protein.” Having been appointed asMarketing Manager of Tiger Brands, you are required to advise theboard on the most appropriate brand crisis management and provide arevised marketing strategy going forward to restore confidence inthe brand and prevent any further negative impact on the brand. Youare required to research this incident and the company indetail. Your report should focus on the followingissues:
1. Situation analysis: assess the current situation that TigerBrands is facing
2. The impact the incident had on the brand
3. Tiger Brands’ positioning strategy before and after theincident and assess how this situation has affected the positioningof the brand in the mind of the consumers.
4. Public Relations steps and approach to be taken to diffusethe public outcry.
5. Revised Marketing strategy GOING FORWARD
