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SA cold meat producers responsible for delay in tracing listeria cause
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Wednesday, 07 March, 2018, 08 : 00 AM [IST]
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Johannesburg
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The South African government recently stated that cold meat producers were mainly responsible for the delays in tracing the cause of what was being described as the world’s worst listeria outbreak, which has killed 180 people in the past year.
As shoppers queued up to return processed meat items and demand refunds, shares in Tiger Brands, the biggest food firm in Africa’s most industrialised economy, tumbled because of its link to the outbreak that has spread since January 2017.
The government, which has been criticised for taking too long to find the cause, linked the outbreak to a meat product known as polony, which was made by Tiger’s Enterprise Food.
It added that it was investigating a plant owned by RCL Foods, which makes a similar product. Its shares also slid before recovering.
Both companies, which say they are cooperating with the authorities, suspended processed meat production at their plants after health authorities ordered a recall of cold meats associated with the outbreak from outlets at home and overseas.
The United Nations’ World Health Organization (WHO) called the outbreak the largest ever recorded globally, after 948 cases were reported since January 2017. Listeria causes flu-like symptoms, nausea, diarrhoea and infection of the blood stream and brain.
South Africa’s health ministry said the source was found after pre-school children fell ill from eating polony products traced to processed meat producers.
“The meat processing industry was not cooperating for months. They did not bring the samples as requested. We had long suspected that listeria can be found in these products,” said Popo Maja, the ministry’s communications director.
“It is not that we are incompetent, or that we have inadequate resources,” he added on being quizzed why it had taken more than a year to find the cause of listeria.
Maja said all firms in the industry were being examined.
South Africa’s processed meat market grew about eight per cent in 2017 to a retail value of $412 million, according to Euromonitor International.
Tiger Brands has a 35.7 per cent market share, followed by Eskort Bacon Co-Operative with 21.8 per cent. Rhodes Food, RCL Foods and Astral Foods each have less than five per cent.
Tiger Brands, Eskort, RCL Foods, Rhodes and Astral said they had complied with all the requests from the health authorities.
Lawrence McDougall, chief executive officer, Tiger Brands, said there was no direct link between the deaths and its cold meat products. He added, “We are unaware of any direct link.”
The country’s health minister, Aaron Motsoaledi, said the outbreak had been traced to a Tiger Brands factory in the northern city of Polokwane.
The authorities are also examining a second Tiger Brands factory and have not said when they could conclude tests on RCL Foods, which has a plant under investigation.
Rhodes said it produced processed canned meat, different from the cold processed meat made by rivals. Astral said it produced fresh and frozen chicken, not polonies and items linked to the outbreak. Both those firms said their products were safe.
Fast food chain owner Famous Brands said it was recalling ready-to-eat meat products from its retail outlets.
Retailers initiate action
The minister told South Africans not to consume any ready-to-eat processed meat due to the risk of cross-contamination.
The announcement prompted a frenzied clearing and cleaning of the shelves by local supermarket chains Shoprite, Pick n Pay, Spar and Woolworths, which also urged consumers to return the meats for refunds.
Neighbouring countries also acted swiftly. Zambia banned imports of South African processed meat, dairy products, vegetables and fruit. While Mozambique and Namibia halted imports of the processed meat items, Botswana said it was recalling them and Malawi stepped up screening of South African food imports.
Shares in Tiger Brands sank as much as 13 per cent, before recouping some losses to close 7.4 per cent lower at 393.38 rand. RCL Foods fell more than six per cent, but later recovered to trade down just 0.5 per cent at 17.11 rand.
Analysts said profits at the two firms were unlikely to be hit hard. Sumil Seeraj, analyst, Standard Bank, estimated the recall would cut operating profit at Tiger Brand’s value-added foods division by six per cent at most.
“The big hit is going to come with inventory write-offs because they are recalling all these products. That is most likely where they will lose because the inventory write-off will affect operating profit from that division,” he added.
Seeraj said the Enterprise unit of Tiger Brands had a very strong brand in meat, adding, “In the short term, consumers will switch to other forms of protein.”
(Source: Reuters)
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