Shares in Tiger Brands slumped by 2.63% on the JSE yesterday after the company said it had reached an agreement to compensate individuals affected by an earlier outbreak of listeriosis in South Africa.
Between 2017 and 2018, South Africa was rocked by an outbreak of listeriosis that may have resulted from meat products produced by Enterprise Foods, a division of Tiger Brands in Polokwane. The outbreak affected about 1000 people, with 216 deaths suspected to have emanated from the outbreak.
On Monday, Tiger Brands said it had reached an agreement with Richard Spoor Inc and LHL Attorneys representing those affected by the listeriosis outbreak in a class action “for advance payments” to be made. The payments will be made to persons who are seeking interim assistance to address urgent medical needs as the class action continues.
“The parties are engaged in discussions to extend the relief to other qualifying claimants who are in a similar position,” said Tiger Brands in a statement on Monday.
Although the company is denying liability, it says it has “product liability insurance cover appropriate for a group” of its size.
“Coverage is subject to the terms and limits of the policy,” Tiger Brands said in its 2024 annual report.
In the full year to September 2024, Tiger Brands’ marginally lifted its group operating income to R3.14 billion “against the backdrop of a challenging” operating environment. However, headline earnings per share (Heps) in the company increased by 4% to 1 810 cents.
In late afternoon trade on the JSE on Monday, shares in Tiger Brands traded at R268.88, a 2.63% fall from its previous close.
Although shares in Tiger Brands are up 0.29% in the past seven days, the company’s stock has traded 4.78% weaker on the JSE in the past 30 days and is 4.45% lower in the year to date.
Richard Spoor, the founding director of Richard Spoor Inc, said the agreement for Tiger Brands to make advance payments to assist those affected by listeriosis was “an important inroad and a first step in the parties’ efforts towards justice” for the victims.
“The interim advance payments will go some way towards relieving the acute needs of the recipients,” said Spoor.
Commercial and corporate law experts at Trudie Broekmann Attorneys said Tiger Brands had taken “first step towards justice with advance payments” to the listeriosis claimants.
Tiger Brands CEO, Tjaart Kruger, said the company was engaged in efforts to “explore a broader resolution” of the class action.
“The legal process has proved long and arduous. Even though liability has not yet been determined and Tiger Brands has no legal obligation to provide interim relief at this stage in the class action, the interim advance payment to a number of claimants with urgent needs recognises the debilitating circumstances in which they find themselves,” said Kruger.
Despite Tiger Brands agreeing to make an advance payment, the class action related to the listeriosis outbreak and which is being managed in two stages, is still at the first stage during which a court determination on the company’s liability will be made.
“Only if Tiger Brands is found to be liable will the issue of causation arise, in the second stage of the class action, as well as an assessment of compensation payable to qualifying claimants for damages suffered,” said the company.
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