Let us rather review Tiger's Financial Results for last year first. If there is a huge amount of money left over to pay Dividends higher than their historic norm then you know they were profiteering.
One thing I can confirm and other people I know agree. It is difficult to make a profit these days. Turnover goes up and you think Wow it has been a good year, but when you look in the kitty there is often only just enough to pay for the bills that month and then the new month starts all over again. Actually quite sickening.
Last year Businesses pushed up prices due to the doubling of the fuel price. Now that the fuel price has dropped back to where it was or even cheaper you think the prices will get some relief, forget it, as those same businesses have now absorbed the higher prices into the running of their businesses elsewhere in the organisation as now sales are slower. We cannot win this one guys. Especially when you have a Government in which every Department thereof seeks to boost their own coffers as they too are perhaps either greedy or underfunded. Every little increase pushes up living costs. From the price of water, electricity, rates and the like which are mostly under control of Government.
Personally I think the members efforts to take Tiger to task because of perceived profiteering is a noble cause, but then why not take Government to task as well.
1.Government got away with a 50% increase in Electricity Tariffs last year.
2.Mr Manuel has been steadily increasing the fuel levy come every budget for more years than I can remember. Mr Manuel's Department stuffed up the Deficit figures the end of last year as they were overstated by Billions bringing added unnecessary strain in the Rand.
3.Sasol, once a Public Utility, controls the price of the raw materials needed for packaging. Things go up, but when do they come down. Tiger needs huge amounts of packaging.
4.The rest of the World is sitting on near zero interest rates, but SA's REPO Rate is well over 10%. Estate Agents cannot sell houses for more than a year now. Did the SARB do enough? Even the way they calculate the CPIX Figure fell under scruting and it is clear our Reserve Bank is overly Conservative.
5.New NCA. Although a good thing. But BANG, like most things in SA. First nothing and then bang there you are, a new Law that hardly anyone understands or cares much for. How many jobs have been lost as a direct result? In hindsight it was a good thing, but what if ..
6.Maybe the highest Bank Charges in the World. When are we going to have relief here?
7.Tiger's raw products come from the farmer. Think of him for a minute. His costs have doubled last year. Not all his costs, but the most important ones like Fertiliser and Fuel. Poor farmer has a raw deal as when the crop fails he get nothing and when he has a good crop it is likely that the other farmers have the same results and the market is flooded and he cannot get a price. I know farmers in the past that would plough cabbages back into the earth as the cost of harvesting it was more than they would get on the open market.
I can go on, but let me not bore you. Let's see what Tiger's figures say for last year.
At an outside change they could be cross subsidising the purchase of AVI.
The PIC owns nearly 15% of Tiger Brands.
