In a move likely to cost around R650 million in total lost revenue, canned food manufacturer KOO recently recalled 20 million canned vegetable products because of safety concerns.

In a regular transport and handling test, the company inspected 287 040 cans and found a side seam leak had developed in two of them.

Tiger Brands, which owns KOO, subsequently released a statement saying, “A leak in a can presents a risk of secondary microbial contamination after the canned products are dispatched into the marketplace. Where such contamination occurs, it will present a low probability of illness and injury if the contaminated product is consumed.”

Yet despite this “low probability,” the recall – which translates to around 9% of KOO’s annual production – was put in place.

The stock market’s response was swift and brutal: Tiger Brands’ experienced an initial drop in share price of 6.40%.

But this is undoubtedly a loss the food manufacturer is happy to absorb – not only to ensure the health and well-being of millions of KOO consumers, but to avoid a potential disaster like the Enterprise scandal back in 2018.

Back then, Tiger Brands was ordered to recall its processed meats and shut its factories after the National Institute for Communicable Diseases and the World Health Organisation confirmed its Polokwane factory was infested with the specific strain of listeria bacteria linked to the outbreak.

It was later revealed that Tiger Brands had not told consumers of a recall of listeria-infected chicken polony from its factory weeks earlier.

The result was the world’s biggest listeriosis outbreak, which killed over 200 people and saw Tiger Brands’ share price drop by 40%.

Yet the organisation was slow to acknowledge any kind of culpability or responsibility. In fact, it was a full 18 days before they announced the recall of all potentially contaminated processed meat products.

The entire incident was handled deplorably by a company whose products are eaten by upwards of two million people every day. Three years later, Tiger Brands is still involved in litigation with the families of the 216 people who died as a result of eating the contaminated products.

They have since sold their processed meat division.

The scandal threw into stark relief the numerous rules of crisis management Tiger Brands broke. The most critical of these were:

  1. Stop the harm
  2. Apologise if you’ve screwed up
  3. Be human in the face of a tragedy

A product recall is undoubtedly the kind of crisis that throws up several unique logistical, legal and, above all, ethical considerations. And the way in which a company handles it speaks volumes about the way they approach business in general.

If not managed correctly, it has the potential to destroy a company – not only financially, but from a brand reputation, trust, and general goodwill perspective too.

Thankfully, most incidences of foodborne disease outbreaks are completely unintentional.

It’s important to remember that in the food industry, everyone from farmers to food processing companies are under significant pressure to balance the costs of improving food safety handling processes with remaining competitive.

These pressures can create what is called a motivated blindness bias, which can cause decision-makers to take shortcuts, or overlook certain processes. This can then increase the risk of food contamination.

However, having said that, the truly important thing is what companies do when an incident does occur.

Sweeping it under the rug, as with the Enterprise debacle, is the very worst plan of action which, in that incident, tragically resulted in the loss of many lives.

Taking ownership of the issue, admitting the potential dangers upfront, and taking swift, decisive steps to mitigate any potential fallout is the smart and ethical approach.

And this is exactly what KOO did after the discovery of the faulty tins.

In doing so, far from denting their reputation (despite the dip in share price) KOO has actually given the brand a huge boost. By the doing the right thing, the ethical thing – despite the massive cost – they have shown that the health and safety of their consumers is their most important consideration.

Kudos to KOO – this move really was the best you can do.

JGL Forensic Services helps companies develop ethical, sustainable businesses so that together we can build a South Africa that we are proud of.

We assist you to create the right context for ethical and sustainable business practices to thrive by means of proactive training and ongoing awareness of risks and show you how this can result in profitable growth for the company.

Talk to us in confidence, and let’s work together to prevent corporate corruption and fraud.

Jacques van Wyk CEO – JGL Forensic Services

info@jglgroup.co.za

http://jglforensics.co.za/