Tiger Brands’ reputation under fire
For the second time in a little over a decade, Tiger Brands is embroiled in a scandal. But unlike the bread cartel scandal of 2007, this time 180 people – many of them infants – lost their lives in what the UN has called the worst outbreak of listeriosis recorded globally.
On Sunday the health department, which had for months been battling to find the source of the outbreak, announced that an Enterprise Foods factory in Polokwane was the culprit. Enterprise Foods is a subsidiary of Tiger Brands.
The National Institute for Communicable Diseases (NICD) has supported the department’s finding, saying it has conclusive proof that the Enterprise factory is the source of the outbreak, according to a Daily Maverick report.
Despite the NICD’s claim that the deadly strain of listeriosis has the same DNA footprint as that carried by Enterprise products, Tiger Brands CEO Lawrence MacDougall has insisted there is no direct link between the company’s products and the disease. He said only low levels of the listeria bacteria had been found in three Enterprise products, and that the company had voluntarily halted operations at its Polokwane and Germiston factories.
In what appeared to be a carefully managed press conference, MacDougall said the company would not apologise until it has been found to be negligent.
The big take-out:
Tiger Brands’ response to the health department finding that one of its factories was the source of the listeriosis outbreak offers lessons in how not to manage a reputational crisis.
Has Tiger Brands taken an uncompromising stance due to fear of a class-action lawsuit, or has it simply adopted a poor crisis management strategy? To many consumers, the fast-moving consumer goods giant has come across as an arrogant corporate that has prioritised profits over food safety and human life.
“SA consumers, still reeling from the tragic Life Esidimeni deaths, are feeling particularly fragile right now, and the approach taken by Tiger Brands to this crisis is not one we would advocate,” says reputation specialist Janine Hills, of Vuma Reputation Management. “Stating categorically that the company hasn’t found the link and denying culpability is not striking the right chord.
“At times like this, organisations must show their empathy and humanness first and foremost. MacDougall needed to come across in the press briefing as more empathetic to the plight of those who fell ill and those who lost their lives. Instead, his voice was very controlled throughout.”
Hills says Tiger Brands also took too long to get its statement out. “Transparency is critical in crisis management. Organisations need to get their holding statement out as quickly as possible and then follow up within 24 hours with the results of their own investigations. Capitec got this right [after a potentially damaging Viceroy research paper was released], with the result that it successfully weathered the Viceroy claims.”
While Tiger Brands’ share price has bounced back after dropping on Monday, it will in all likelihood take consumers much longer to regain their trust in Enterprise Foods and its holding company.
“Their reputations will undoubtedly suffer long-term damage, but it’s how they deal with this crisis that will determine how quickly consumers forgive them,” says Hills.