19 million defective KOO and Hugo canned products returned after recall

By Lisa Isaacs Aug 24, 2021 Cape Town -

More than 19 million KOO and Hugo canned products have been returned by consumers to Tiger Brands as of Monday. The company in July announced it would recall certain canned vegetable products including baked beans, produced from May 1, 2019 to May 5, 2021 due to a number of defective cans by a packaging supplier. The cans may have a defective side seam weld that could cause the can to leak. The financial impact of the recall was estimated at between R500 million and R650 million. As at 23 August 2021, more than 19 million cans have been returned by consumers and customers. When the company announced the recall on 26 July 2021, Tiger Brands estimated the number of cans forming part of the recall to be approximately 20 million, Tiger Brands said yesterday. The National Consumer Commission (NCC) on Monday said the recall was progressing well and was not yet finalised. Acting commissioner Thezi Mabuza said: The major factor that is drawing the recall is its vastness in terms of the network of markets (countries) that the canned products were exported to; and the volume of the products on its own. In accordance with the NCCs Consumer Product Recall Guidelines, the supplier is required to notify the NCC and to come up with a recall strategy, and the retrieval of the product. The supplier in this instance is required to report on the progress of retrieval of the affected goods to the NCC periodically. The NCC is monitoring the recall process at this stage to ensure compliance with both the CPA and the Consumer Product Recall Guidelines. The supplier is further required to submit progress reports to the NCC on its effort in dealing with the recall and that report is due by the end of August, Mabuza said. No decision has been taken as yet in terms of launching an investigation into the matter, Mabuza said. SOURCE: FIN24, 2021

Question 1

1.1 The financial impact of the recall was estimated at between R500 million and R650 million. Analyse the statement and article above and critically discuss the impacts of the mentioned product recall on organisational performance of Tiger Brands. (25)