Tiger Brands workers down tools in KwaZulu-Natal over higher wages

Tiger Brands, which suffered losses of more than R150m due to the unrest in July and is struggling to shake off the effects of Covid-19 and lockdowns, has become the latest major company to be subjected to a damaging strike.

Lungelo Makhathini, national co-ordinator of the African Meat Industry and Allied Trade Union (Amitu), which represents about 1,200 members, said the wage strike at the company's confectionery brand Beacon in KwaZulu-Natal started a week ago after negotiations reached a deadlock. Employees at the snacks and treats division in Durban also downed tools.

Amitu members embarked on an indefinite wage strike last Wednesday after the union received a certificate of non-resolution from the Commission for Conciliation, Mediation and Arbitration (CCMA). The union is demanding a 7% wage, while management offered 3%, the lower end of the Reserve Bank's 3% to 6% target range and lower than the 5% clocked in September and October.

The strike is just the latest setback for a company that at the end of October flagged a drop of as much as 15% in annual earnings, translating to a decline of about R340m.

Tiger Brands, which owns well-known SA staples such as Tastic rice, Beacon chocolates, Gill shampoo and Enterprise, is no exception. In July, the company had more than R1bn wiped off its off its market value after recalling millions of canned vegetable products, in its latest food concern following a listeriosis outbreak in 2017 that killed more than 200 people.

The spate of labour instability in SA threatens to derail the recovery of companies that were hard hit by an economic shock from Covid lockdowns that led to a 6.4% contraction in SA's GDP.  On the other hand, workers are trying to claw back earnings after a loss of more than 1-million jobs and a pandemic that saw many have to take pay cuts.

Tiger Brands was one of the businesses affected by the violent unrest experienced in Gauteng and KwaZulu-Natal in July, forcing the food producer to temporarily close all operations in KwaZulu-Natal, which accounted for the bulk of the more than R150m loss the company suffered as the result of the violence.

On Wednesday, Makhathini told Business Day that the company’s Beacon factory in Durban, which manufacturers chocolates and sweets, had been shut down as a result of the industrial action.

He said Amitu would hold a meeting with the Food and Allied Workers Union (Fawu) and the SA Commercial, Catering and Allied Workers Union (Saccawu) for the Cosatu affiliates to galvanise Tiger Brands employees in Gauteng to join the strike.

In October, operations at Tiger Brands’ Albany Bakery in Germiston were interrupted following a wildcat strike that resulted in bread shortages across Johannesburg. Tiger Brands, which is valued at about R35bn, applied to the labour court, which declared the strike illegal.

“The management has reached out to us to say we should call off the strike so that we can talk. But that doesn’t make any sense. The bottom line is: the strike is indefinite, that’s the mandate,” said Makhathini.

Tiger Brands said it was committed “to engaging employees and their recognised representative trade union to find a speedy resolution of the dispute”.

Its shares were down 1.04% to R196 by the JSE’s close, and have now fallen nearly 6% so far this year. It has a market cap of R37.205bn.

Update: November 17 2021
This story has been updated with new share price information.

mkentanel@businesslive.co.za