• Tiger Brands lost R5.7 billion in market capitalisation in the first two hours of morning trade.
  • The government had directly linked Tiger Brands' Enterprise brand to the strain of listeria that it believes caused 180 deaths.
  • Tiger and Rainbow Foods have both pulled ready-to-eat meat products off shelves, beyond the scope of a mandatory recall.
  • It is not yet clear what the financial impact on either company will be.

The share price of Enterprise Foods owner Tiger Brands dropped a little over 7% in morning trade on Monday, the first trading day after it was directly linked to a deadly outbreak of listeriosis – wiping roughly R5.7 billion off its value.

RCL, the listed parent of the Rainbow brand that also had to pull products from shelves, saw a much smaller 3.5% drop in its share price. That is worth about R560 million in market value.

Several retailers have pulled all of the two companies' ready-to-eat meat products from shelves – even before negotiations on who will cover the costs.

By law, the manufacturers must accept returns of their products directly linked to listeriosis, but by Sunday retailers were refunding customers for returns on a much wider range of products than had been formally recalled.

See also: 'White slime' – imported from Brazil at R4 a kilogram – may have triggered South Africa’s listeriosis crisis

The government has linked the specific strain of listeriosis-causing bacteria it found at an Enterprise factory in Polokwane to the deaths of some 180 people. However, it was not immediately clear if there would be any attempt to hold the company financially liable for those deaths.

Tiger Brands on Sunday said it was still waiting for its own tests to confirm the government findings.

Analysts were not concerned for the long-term prospects of either Tiger Brands or RCL, but were cautious about volatility in the coming week.

"For Tiger, this is a small part of its business," said one analyst. "The revenue they lose will hurt, but it is not going to take them down."

In a worst-case scenario, he said, Tiger Brands could kill the 101-year-old Enterprise brand to stop contagion to its other cold meat brands such as Renown.

"That would be extraordinary, but that is an option they have if it gets really bad."

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