The Congress of South African Trade Unions (COSATU), its affiliates and other unions will picket outside Premier Group’s Annual General Meeting (AGM) in Midrand on 9 September. The 400 workers, 200 farmers, thousands of farmworkers and five rural communities whose livelihoods will be devastated if Premier closes its Tulbagh canning factory cannot be inside that room. So, unions will be outside to ensure the shareholders who hold this board to account understand what is at stake.
Shareholders have hard questions to ask.
During Premier’s merger with RFG Holdings, our affiliate SACTWU fought for and secured a critical win: a condition from the Competition Tribunal that any retrenchments over the next three years are presumed to be merger-related and prohibited unless Premier proves otherwise to the Competition Commission. Less than five months after merger approval, without first having satisfied the conditions the Tribunal attached to its approval, Premier announced its intention to close its newly-purchased Tulbagh canning factory. SACTWU immediately referred the matter to the Competition Commission for investigation. The process is ongoing and may not be completed by the time Premier seeks to issue retrenchment notices at the end of September.
Premier’s shareholders deserve to know what it means for their investment if the Tribunal order is violated. They should demand to understand why the board considers it necessary to take such a hasty risk with a state regulator.
Premier blames the closure on US tariffs and Chinese competition. Neither was unknown or unforeseeable. Shareholders deserve a coherent account of what changed so radically in five months that a bullish multibillion-Rand acquisition became a R1 offer to dispose of the canning plant – and what the board actually knew, and disclosed to competition authorities, during the merger process.
When the Tribunal approved this merger, it did so on the basis of a two-player market. Through the manner of Premier’s planned exit – a rushed process in which it seems intent to hand over the factory or its production volumes to its only competitor, or simply close – Premier now appears set to reduce that market to a single player. Shareholders should ask how seriously the board considered this outcome, and whether the risk of monopoly was disclosed to regulators at all.
COSATU and a broad coalition of organisations are determined to prevent this closure. We have approached NEDLAC for a Section 77 engagement – a structured process that brings together Premier, farmers, government, community groups, workers and unions to find a sustainable solution. This is the kind of serious, multi-stakeholder process this crisis demands and which Premier’s rushed timeline has so far foreclosed.
None of these are abstract concerns. They carry concrete legal, regulatory and reputational consequences for Premier and for those who hold its shares. Unions will be outside the AGM to defend workers and communities. Shareholders inside that room should be asking these questions, and others, to defend their investments.
Issued by COSATU