BL Premium reports that the Labour Appeal Court (LAC) has endorsed the retrenchment of scores of workers by soft drink giant Coca-Cola Beverages Africa (CCBSA) in response to the introduction of a sugar tax causing it operating losses.

This after the National Union of Food, Beverage, Wine, Spirits and Allied Workers took the company to court, asking it to set aside the retrenchments. The court last week dismissed the application, saying the Labour Court had applied the law correctly in ruling for CCBSA. The company told the LAC that it was forced to implement retrenchments due to the financial pressure exerted by the sugar tax at the end of 2018 financial year that compelled it to fork out R2.1bn in sugar tax. That was in addition to the R850m worth of discounts it had to give, while sales volumes fell 2% during the year. Combined, these factors caused it to report a R293.8m drop in profit in the year. The LAC found as follows: “In short: CCBSA’s response to the crisis precipitated by the introduction of the sugar tax, increased costs and a declining market was a rational response to arrest the economic decline that it experienced, and its decision to restructure the commercial division, and in particular the structure within which merchandisers and pre-sellers were engaged, is not unreasonable having regard to its operational requirements.” The decision by the LAC hands Coca-Cola a second significant victory after the Constitutional Court in April ruled that the retrenchments were part of business requirements, after the Competition Commission accused the company of sidestepping conditions of a 2016 merger.

• Read the full original of the report in the above regard by Noxolo Majavu at BusinessLive (subscriber access only)

Get other news reports at the SA Labour News home page