It’s the last thing that Tiger Brands — still trying to salvage its reputation after the 2018 listeriosis scandal — needed: a recall of baby talc after traces of asbestos were found in the product. The recall is hardly on the scale of what unfolded at Johnson & Johnson. In August, the US pharmaceutical giant dropped its talc range amid a series of huge lawsuits alleging it spent decades hiding cancer risks linked to the baby powder. Still, the news drove skittish investors to dump Tiger’s shares last week, taking its year-to-date losses to almost 10%. The FM spoke to CEO Noel Doyle.
How did this happen?
Previous testing on product from this supplier came out all clear. In this batch, despite there being a certificate of analysis, they found trace levels of asbestos. It’s a supplier we’ve had for at least four or five years, so it’s not a new company we brought on board for cost-saving reasons, say. When you have this result you’ve got to do the right thing; we’re members of an industry body that advocates for zero asbestos in cosmetic products, and we will live up to those values.
Could these traces have been out there for a long time or is it just this recent batch?
It’s difficult for me to be definitive but right now it’s only this batch. Previous testing indicated no problems.
Do you not have to be hyper-vigilant about your supply chain, especially after the listeriosis disaster? Or is this evidence that you are being hyper-vigilant?
We are being hyper-vigilant but, for context, we produce 4,500 products and if you look at the number of ingredients that go into them it’s a multiple of that. The fact that it’s been detected tells you we have the procedures in place that you would expect.
You could say Tiger is desperately unlucky or you could say lightning keeps striking the same tree. Why is that?
Now the investigations begin into what we could have done differently. I don’t have an answer to that question and we will get to the bottom of what we could have done better.
Is it simply poor management?
We have been, and are, moving heaven and earth to ensure we don’t have incidents of this nature. It is a big business with a big portfolio and there are a lot of really good processes in place. We use world-class experts to advise us, and still we have these gaps. Clearly it isn’t good enough, though I’m not sure I would say it’s gross management incompetence. But when people make those comments, it’s very hard to say, “that’s unfair”.
What’s the response been?
Customers are actually sympathetic. And from the scale of it, it’s nothing like what we dealt with on Koo [which recalled canned vegetable products in 2021], where you had 20-million plus cans. Here, it’s probably three truckloads of the product that are coming back. You saw what happened to the share price, which I think reflects our repeat offender status. People are obviously concerned and then realise it’s not material financially and there’s no evidence we’ve done any harm to anybody. It is precautionary. Some shareholders ask whether we are being overly cautious, and some are saying there’s a quality premium attached to Tiger’s earnings in the sense that Tiger will have to have — and does have — rigorous and expensive quality-control procedures. We probably have more than others because we have less leeway to make a mistake.
Why would you buy raw materials from China for baby products?
Chinese manufacturing has moved on a long way. When we take on a supplier we have them audited and we normally get certificates of analysis that in the past we’ve been able to rely on. If you exclude China as a manufacturing supplier base, that would be quite challenging. And you have to look at some of the recent recalls in Europe, some of which were not necessarily linked entirely to the origins of raw materials. We are not naive about origins but we take the precautions we consider appropriate. The criticism I fully expect to get, sitting in front of shareholders, is that this product turns over R7m-R8m a year out of R30bn. So given the potential risk profile, should we just stop producing it? It probably isn’t worth the corporate contamination that would come with an isolated incident like this.
Do you feel you’re fighting a losing battle in restoring Tiger’s reputation?
No. What’s happened doesn’t reflect a lot of the good work that’s been done at Tiger. If we meet the commitments we made at the half year, from a financial performance perspective as well as the other more intangible aspects in terms of reputation, I think we were making progress. So this has been really hard to take. But it isn’t about us — we’re paid to deal with it; the shareholders are the ones who take the pain, as well as consumers when you create this level of uncertainty. But I still feel very upbeat about where we can take Tiger, and I think there’s a lot of positive momentum.
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