Taste Holdings to liquidate food business amid recession
JOHANNESBURG - South Africa’s Taste Holdings said on Monday it was in the process of placing its food business into voluntary liquidation after a failed attempt to offload its Domino’s Pizza business.
Taste’s move to liquidate the business comes after South Africa entered its second recession in two years in the final quarter of last year.
The company, which has been facing poor retail sales, in November said it would sell its Starbucks and Domino’s Pizza franchises in South Africa, retreating from a food industry that has been hit hard by the sluggish local economy.
However, Taste on Monday said the deal to dispose the Domino’s business could not be concluded on terms acceptable to all parties, adding that further financial support was not provided by Domino’s Pizza.
Following the liquidation of Taste’s food businesses - Taste Food Franchising Proprietary, Taste Commissary Proprietary and Taste Food Trading 1 Proprietary Ltd - the company will have to fully impair the remaining intercompany loans, with the units valued at about 450 million rand ($27.38 million).
Taste Food Franchising Proprietary owns and licenses Domino’s Pizza franchises in South Africa.