Negotiations Break down regarding Premier Foods Factory Closure

Discussions at the Commission for Conciliation, Mediation and Arbitration (CCMA) regarding the proposed shutdown of Premier Group’s fruit canning facility in Tulbagh have collapsed.

Nyaniso Gqalaqha, Western Cape provincial secretary of the Agricultural, Food and Allied Democratic Workers’ Union (AFADWU), who participated in the talks on 26 August, reported that Premier opposed the inclusion of two worker representatives in the discussions.

Read:

SA’s fruit canning sector faces risks as Premier Foods plans closure

Tulbagh’s livelihood hinges on its canning factory, now set to close

The consultation period deadline between Premier and the unions at the CCMA is scheduled for 26 September.

Premier Foods share price

Gqalaqha noted that Premier raised objections to the involvement of Malvern de Bruyn, the Western Cape provincial secretary of the Congress of South African Trade Unions (Cosatu), who had participated in prior discussions.

Read: ‘There’s a lot of opportunity to drive costs out’ – Premier CEO

Additionally, the company contested the presence of a union shop steward, claiming that he was a seasonal employee rather than a permanent one and thus could not negotiate as an AFADWU representative.

The dispute was escalated to the commissioner, who halted the proceedings and is anticipated to make a ruling before discussions resume on 8 September.

In a response to GroundUp, Premier stated that the consultation process regarding the factory’s closure “remains ongoing”.

The company asserted that it would refrain from further comments to “uphold the integrity of the consultation process”.

“Premier remains dedicated to engaging in good faith,” the company emphasized, noting its exploration of “practical solutions and opportunities for the future” of affected employees, farmers, suppliers, the community, and the broader value chain.

The factory closure would impact 246 permanent employees and 178 fixed-term staff, amounting to a total of 424 workers, according to Premier.

Unions request an extension

Gqalaqha expressed concern that no further discussions had occurred regarding alternatives to the shutdown.

He remarked that even if a new buyer is identified, it would be too late to address the upcoming apricot season starting in November.

The union and Cosatu, with which AFADWU is affiliated, are advocating for a one-year suspension of the closure process to allow time for alternative options to be explored.

Cosatu, with contributions from another affiliate, the Southern African Clothing and Textile Workers’ Union (Sactwu), is also questioning Premier’s approach to the closure on competition-law grounds.

On 6 March, the Competition Tribunal approved the merger between Premier and the Rhodes Food Group, which owned the Tulbagh facility.

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The approval came with conditions, one of which stipulates that no employee should be retrenched as a consequence of the merger during a three-year moratorium period.

A provision requested by Sactwu specifies that workers and unions do not have to demonstrate that retrenchments are connected to the merger; the onus to prove otherwise rests with Premier.

Nonetheless, the conditions permit retrenchments for operational needs unrelated to the merger, and Premier maintains that the plant’s closure is based on operational and financial decisions rather than the merger.

Closure under scrutiny

The Competition Commission informed GroundUp that it is investigating whether the closure violates the conditions tied to the merger approval and whether all pertinent information was disclosed to the commission during the merger’s review.

If a violation is identified, the competition authorities could impose fines of up to 10% of the company’s annual turnover in South Africa and its exports from South Africa in the previous financial year, or possibly revoke the merger’s approval, the commission stated.

It aims to conclude the investigation within the next three months.

Meanwhile, Cosatu and its allied unions plan to hold a picket outside Premier Group’s annual general meeting in Midrand on 9 September.

© 2026 GroundUp. This article was first published here.