Question

Read the article below and complete the task at hand.

LISTERIOSIS OUTBREAK IN SOUTH AFRICA In March 2018, Tiger Brands suspended operations at its factories in Polokwane, Germiston and Pretoria, which the department of health had linked to the listeriosis outbreak and had claimed over 200 lives in South Africa, and infected over 1,000 others, mostly pregnant women, children, the elderly and people with chronic health conditions fell ill because of the infection. Tiger Brands was thrown into the centre of the listeriosis storm after South Africa’s National Institute for Communicable Diseases announced that its investigation had traced the origins of the disease to one of the company’s biggest meat processing plants. The culprit was identified as polony from the Enterprise Foods facility that produced a range of cold meats. Tiger Brands, a $2.5-billion Johannesburg Stock Exchange-listed business, owns Enterprise Foods among another continent-wide popular food brands. South Africa has been struggling with the listeriosis outbreak for 14 months. Unable to find the source of the affected products, the outbreak developed into the worst case of listeriosis in the world. By the end of February 2018, health authorities had confirmed 948 cases with 180 fatalities. The repercussion was always going to be unforgiving. But Tiger Brands did not help the situation. It overlooked a number of the accepted protocols of handling a crisis of this nature. As a result, the company’s brand equity took a serious strain. The SA government decisively responded to stop the outbreak of Listeriosis. All manufacturers were instructed to recall processed, ready-to-eat meat products; exports of such products were suspended; the public was advised to avoid all processed, ready-to-eat meat products; the products were isolated, returned to the stores for a refund and thorough cleaning was carried out both at the stores and at home where they were kept. This intervention was welcomed by all, but more decisive measures were required. Tiger Brands recalled all products across the country. At the time, it projected that the recall would cost it as much as R377 million. The costs excluded ongoing trading losses and were calculated on the assumption that the facilities would be reopened by 30 September 2018. All frozen stock tested proved negative for Listeria monocytogenes. The remaining carrying value of frozen stock exposed to potential future write-offs is R80 million. All other stock of product, raw materials, packaging and ingredients, which were expected to be utilised following a recommencement of operations amounted to R103 million at 31 March 2018. In March, the group warned that the monthly impact of a complete cessation in production equals an ‘adverse movement’ of approximately R50 million at earnings, before interest and tax level relative to the existing earnings base. Tiger Brands published its interim financial results for the six months ended March 2018, showing what effect the devastating listeriosis outbreak had on its bottom line. The group recorded a 4% decline in revenue for the period to R15.7 billion (from R16.4 billion before) while operating income (before impairments and ‘abnormal items’) declined 8% to R2 billion. The recall associated with its value-added meat processing (VAMP) amounted to R415 million but balanced at R363 million, net of the R50 million insurance claim, and R2 million in profit from the disposal of related property. HEPS was down 16% to 868 cents, while an interim dividend was declared at 378cps. “With the exception of VAMP, the group’s core domestic food businesses delivered a steady performance in the six-month period ended 31 March 2018, notwithstanding intense competition and ongoing pressure on pricing as consumers continually search for value,” the group said. However, the R363 million blow was certainly felt, with a further R183 million hanging in the balance as tests for Listeria continue on remaining stock. Tiger Brands faced serious brand erosion as a result of the way it had handled the unfolding crisis. It could have responded better, by being more rapid in its responses. The company only held a media briefing a day after the minister’s announcement of listeriosis.However, the Tiger Brands noted with concern the media statement released by the Department of Health and the National Institute of Communicable Diseases (NICD) on 4 March 2018, which essentially concluded that the present outbreak was traced to a food production facility in Polokwane whilst raising further concerns about a facility in Germiston. They claimed media released was devoid of detail and this lack of details resulted in misinformation which was not only detrimental to the consumer, but also the South African Red Meat Industry. In this regard, the average consumer was being led into a Listeria hysteria which had unfortunate consequences for families who relied on processed meat as their source of protein. At the outset, Tiger Brands pointed out that food safety remained at the heart of their business and assured the consumer that everything possible is being done with the utmost urgency to ensure that consumer’s personal health and well-being were protected not only as a matter of routine but with increased vigilance. The outbreak emphasized the responsibility of the Tiger Brands together with other food industries to provide for proper and improved hygiene during the production, processing, packing and preparation of red meat and red meat products. However, according to Tiger Brands, during the processing of livestock to meat at the abattoir, particular attention is given to slaughter procedures, personal hygiene and sterilization of equipment to minimize bacterial contamination during this process. Furthermore, meat inspection of each animal and carcass ensure the health of the animal and removal of any possible contamination that might have occurred. Microbiological testing of water, product, contact surfaces and hands is a prerequisite at a registered abattoir in terms of the Meat Safety Act, 2000 and supporting regulations. Whilst Tiger Brands was responsible for producing food that was safe for human consumption, it was also the responsibility of consumers not to content themselves, that the only contamination can come from the facilities implicated, but to adopt basic hygienic practices when buying, transporting food home, preparing and storing food to protect their health and to ensure that cross-contamination does not occur between cooked and raw products or from human hands and equipment. Listeria presents a particular concern with respect to food handling because it can multiply at refrigerator temperatures. It is therefore imperative that consumers ensure that the meat they purchase is sourced only from registered abattoirs that have an Independent Meat Inspection Service and that once purchased the cold chain is maintained at all times; as well as to avoid eating raw or undercooked meat products. The SACP called on the government to hold Tiger Brands accountable. They protested that heavy penalties must be imposed for the negligence that resulted in the failure to prevent the bacteria at Tiger Brands Enterprise Foods in Polokwane, in Gauteng and elsewhere at the monopoly’s facilities, and at other companies that failed to uphold food health and safety, Rainbow Chicken included. The union further requested that all workers at Tiger Brands’ Enterprise Foods must receive urgent priority for screening, paid for by the monopoly. The workers’ conditions of employment, including hours of work, must be looked into and be addressed.

TASK: “Unfortunately, the aforesaid media release is devoid of detail and this lack of detail has resulted in misinformation which is not detrimental to the consumer. In this regard, the average consumer is being a Listeria hysteria which is having unfortunate consequences for families who rely on processed meat as their source of protein.” Having been appointed as Marketing Manager of Tiger Brands, you are required to advise the board on the most appropriate brand crisis management and provide a revised marketing strategy going forward to restore confidence in the brand and prevent any further negative impact on the brand. You are required to research this incident and the company in detail. Your report should focus on the following issues:

1. Situation analysis: assess the current situation that Tiger Brands is facing

2. The impact the incident had on the brand

3. Tiger Brands’ positioning strategy before and after the incident and assess how this situation has affected the positioning of the brand in the mind of the consumers.

4. Public Relations steps and approach to be taken to diffuse the public outcry.

5. Revised Marketing strategy GOING FORWARD

Answer 1

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