SA’s largest food producers took a beating on Monday after Pioneer Foods’ half-year results showed that the industry is struggling to pass on higher costs to cash-strapped consumers. Shares in Pioneer, which makes Sasko breads and Ceres juices, dropped as much as 15% to R70.57 — the worst level since March 2013 — after the group said earnings fell in the six months to end-March as costs rose faster than sales. SA’s consumers have been hit hard with the country’s economy falling into recession in 2018. Unemployment is near record highs, as are fuel prices, while an increase in the VAT rate has added further pressure.

Pioneer’s woes spread to other food producers, with Tiger Brands falling as much as 4.4% to R236.94 — the worst level since late 2011.  Investors may have decided that despite their protracted declines, both Pioneer and Tiger were still expensive considering how tough the operating environment is, said Lester Davids, a trading desk analyst at Unum Capital. Consumer...

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