Tiger Brands and RCL Foods’ commitment to food safety in question
The stated level of commitment to consumer health and safety at Tiger Brands and RCL Foods has been brought into question by the scant attention the issue has received in the groups’ integrated annual reports.
In response to the shocking suggestions that they may be implicated in an outbreak of listeriosis that killed 180 people, the two companies issued statements stressing the importance they place on the health and safety of consumers.
However, Rob Worthington-Smith, of independent research firm Farsight, who has studied years of integrated annual reports produced by the two companies, said there was little if any reference to the issue.
If food safety was being taken seriously by these companies, it would have featured throughout their reports, he said.
"Integrated reports represent a great opportunity for companies to communicate with their stakeholders," said Worthington-Smith, but not even the CEO or chairman had raised it in their reports. Nor was any form of food-safety crisis considered as a risk in either groups’ risk management strategy.
"This is a food-processing company’s worst nightmare. There should have been some signs Tiger and RCL considered it a material issue," said one governance analyst.
The lack of apparent engagement on the issue could affect the board’s liability if either of the companies is found to have been involved in the outbreak.
"The people ultimately responsible for the company and its internal controls are the directors. There is a possibility the courts would find them negligent," said the analyst, but noted that in the past the courts tended to give directors the benefit of the doubt.
In Tiger Brands’s case, there is reference to food safety protocols in the context of its procurement policy in the 2017 annual report. Ironically, it also gets a mention in the context of its corporate social investment. It notes that the Tiger Brands Foundation in-school feeding programme "empowers food handlers with appropriate knowledge about food preparation, safety and hygiene".
Both RCL and Tiger Brands record that their facilities are compliant with the food-safety system certification.
In a statement issued in response to the initial Department of Health announcement, Tiger Brands CEO Lawrence MacDougall said: "Food safety remains the highest priority at Tiger Brands, where we always place consumers’ health and safety above all else."
RCL issued a statement referring to its strict food safety protocol: "We have rigorous food safety procedures in place."
Whether or not either company was implicated in the tragedy, all food processing companies should treat food safety as a material issue, Worthington-Smith said. Although the listeriosis crisis has considerably heightened his concerns, Worthington-Smith released a 2017 report in which he raised the issue of poor levels of reporting by all the listed food processing companies.
The issue of product responsibility was almost completely ignored by all the companies, he said. Their attitude to issues the public and regulators regarded as material — such as the link between processed food and obesity and diabetes — was appallingly short-sighted.
Deon Botha of the Public Investment Corporation, the single largest shareholder in Tiger Brands, said the investment manager had engaged with Tiger and was satisfied that it was co-operating with the government in a transparent manner and that appropriate interventions had been introduced.