South Africa’s Oldest Food Producer Explains Why It Is Closing Its Tulbagh Factory

South Africa’s oldest food producer Premier Group has responded to growing criticism over its decision to close a major fruit canning factory in Tulbagh, a small town in the Western Cape.

The closure has raised serious concerns about thousands of jobs, local farmers and the future of the region’s fruit processing industry.

The factory previously operated by Rhodes Food Group, became part of Premier following its acquisition of RFG in a deal valued at approximately R5.7 billion.

However, Premier has now explained that the decision to shut down the facility was driven by difficult conditions in the international canned fruit market rather than its acquisition of Rhodes Food Group.

In its latest financial results, Premier described the global canned fruit market as having suffered an implosion.

The company pointed to several factors that have made the business increasingly difficult to operate profitably.

Premier explained that these pressures created an increasingly unviable environment for its Tulbagh operation, which relied heavily on international markets.

Approximately 90% of the factory’s canned fruit production was exported.

The factory has been an important source of employment in Tulbagh for decades.

Established in 1954 it became a central part of the local economy supporting permanent employees, seasonal workers and fruit farmers.

Its closure threatens hundreds of direct jobs and thousands of seasonal and agricultural livelihoods.

The impact extends beyond the factory itself affecting transport operators, suppliers, farming businesses and small retailers that depend on the facility’s economic activity.

Premier says it has offered voluntary severance packages to affected employees, with the majority accepting the arrangements.

The company has also indicated that it will continue exploring alternative uses for the factory site.

The closure has also created a dispute with the Competition Commission.

The commission argues that Premier’s actions may have violated employment protections attached to its acquisition of Rhodes Food Group.

It has approached the Competition Tribunal seeking to revoke the merger approval or impose additional conditions.

Premier has rejected the allegations, maintaining that the factory closure was not merger-related and that the decision was made because of deteriorating market conditions.

The company says it intends to defend its position.

For the small Western Cape town of Tulbagh, the factory’s closure represents much more than the loss of an industrial facility.

Generations of families have depended on the cannery for employment, while hundreds of fruit producers have relied on it as a market for their harvests.

The controversy highlights the wider challenges facing South Africa’s agricultural processing industry, particularly businesses that depend on international exports.

Although Premier insists the closure is commercially necessary the consequences for workers, farmers and the local economy could be felt for years.

Sources: South Africa’s oldest food producer clears the air over factory closure in small Western Cape town – Daily Investor

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