Cleaning frenzy

Shoprite<br />PHOTO: channelstv.com

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 supermarkets chains Shoprite, Pick n Pay, Spar and Woolworths, which also urged consumers to return the meats for refunds.

Neighbouring states acted swiftly. Zambia banned imports of South African processed meat, dairy products, vegetables and fruit. Mozambique and Namibia halted imports of the processed meat items and Botswana said it was recalling them. Malawi stepped up screening of South African food imports.

Shares in Tiger Brands sank as much as 13 percent, before recouping some losses to close 7.4 percent lower at 393.38 rand. RCL Foods fell more than 6 percent but later recovered to trade down just 0.5 percent at 17.11 rand.

Dozens of customers lined up outside a Tiger Brands outlet with bags of cold meat products and demanding their money back.

“I lost trust with Enterprise. I’ll be scared even if they say this problem is solved. I would rather go back to peanut butter and jam,” said call centre agent Tshepo Makhura, 37.

Deline Smith, a 57-year-old housewife with three full bags, said: “I hope my grandchildren are going to be okay because we gave them food over the weekend from these parcels.”

Analysts said profits at the two firms were unlikely to be hit hard. Standard Bank analyst Sumil Seeraj estimated the recall would cut operating profit at Tiger Brand’s value added foods division by 6 percent at most.

“The big hit is going to come with inventory write-offs because they are recalling all these products. That’s most likely where they will lose because the inventory write-off will affect operating profit from that division,” Seeraj said.

The Enterprise unit of Tiger Brands had “a very strong brand in meat”, he said, adding: “In the short term consumers will switch to other forms of protein.”

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