South Africa’s oldest food producer under investigation for factory shutdown

The Competition Commission is investigating whether the Premier Group breached its merger conditions with RFG by shutting down a fruit processing plant in Tulbagh. 

The plant shutdown will result in job cuts, which may be prohibited under the Competition Commission’s merger approval conditions. 

Premier said the facility’s closure is solely the result of economic challenges facing the global fruit-canning industry and is independent of the RFG transaction. 

This argument was laid out in Premier’s trading statement for the six months ending 30 September 2026, released on Tuesday, 15 September.

The trading statement is the first indication of how Premier’s business is performing after the merger with RFG. 

This merger will boost the company’s revenue by 35% to 45%, with headline earnings per share rising by 22% to 32%. 

Premier’s per-share growth is impressive, given that it issued 37.5 million shares to acquire RFG. This would ordinarily have a negative impact on per-share metrics.

The RFG business has been integrated into Premier’s Culinary division. It said the merger’s benefits are beginning to bear fruit. 

Volume growth across Premier’s categories has boosted its operating earnings, with continued efficiencies and investments supporting the company’s bottom line. 

In the six-month period, Premier commissioned the new Aeroton Bakery and, in September 2026, commissioned a new bakery in Middelburg. 

These facilities will replace Premier’s smaller, ageing bakeries in Potchefstroom and Vereeniging, serving the inland region of South Africa.

A headache for Premier’s management team is RFG’s fruit processing facility in the Western Cape, which is now part of its Culinary division. 

In July 2026, Premier completed an assessment of the fruit-canning industry’s prospects and found it to be in long-term decline as demand for canned fruit plummets. 

“Against this backdrop, the export prospects of the Fruit Processing Western Cape (FPWC) business have deteriorated rapidly to the point where it is no longer economically viable,” Premier said. 

“Accordingly, the Premier Group Board decided not to reopen the FPWC facility for the upcoming fruit-harvest season, subject to the completion of the applicable legal and regulatory processes.” 

Because of this, Premier has begun a section 189 consultation process with 424 employees affected by the closure. 

“Premier’s efforts to mitigate and absorb the adverse consequences for industry stakeholders will incur financial losses for the group,” it said. 

Premier’s acquisition of RFG was approved by the Competition Tribunal in March 2026, subject to the condition that no merger-related retrenchments are implemented for a period of three years.

The Competition Commission has received a formal complaint from the South African Clothing and Textile Workers’ Union.

It is now investigating whether the proposed retrenchments relating to FPWC constitute a breach of the merger conditions.

“The proposed closure of the facility is solely due to the significant structural economic challenges facing the global fruit-canning industry and is thus independent of the RFG transaction,” Premier said.