Tiger Brands could lose R50 million a month, every month, if nobody wants to eat polony again – on top of R802 million in possible listeriosis costs
- It will lose R50 million a month if it has to completely stop making cold meats, Tiger Brands said on Monday.
- The company estimates the total cost of its nationwide cold meat recall will be as much as R377 million.
- That is before another R425 million in possible claims in a class action from those affected by Listeria.
A 10% reduction in cold-meat production would lead to a loss of earning of R5 million per month, Tiger Brand told shareholders on Monday.
But if the company had to cease polony and other "value added meat product" sales entirely, that number will be R50 million per month.
Those numbers have not been audited, it warned, and it could give no guidance on when its affected factories may resume operation.
The lost earnings is not counting the cost of recalling meat products, and the potential for class-action damages, which could total R802 million, it said.
See also: After confirming government tests, Tiger Brands commits to maybe considering listeriosis damages claims – if they are valid (and with some other caveats too)
The company said the "separately identifiable costs associated directly with the recall and suspension of production" at what is now four sites is estimated to be between R337 to R377 million. That includes the cost of destruction.
It has insurance against such costs, but said it anticipates a maximum claim of R94 million.
Tiger Brands also said it has been served with two class action attempts, which will have to be approved by the courts. One is by people who consumed its processed meats and became ill, the other is by dependents of people who dies.
The estimated total claim between the two groups is R425 million, it said.
Tiger Brands has an annual turnover over R3.94 billion.
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