Wal-Mart promises to spend, employ
CAPE TOWN – Wal-Mart’s South African operations plan to purchase R60 billion worth of food locally and employ 15 000 people over the next five years, Massmart CEO Grant Pattison said yesterday.
Pattison appeared before a parliamentary committee which is holding hearings into Walmart’s R16,5 billion acquisition of Massmart Holdings.
The hearings’ terms of reference have been constrained so as not to interfere with an appeal lodged with the Competition Appeals Court by the SA Commercial Catering and Allied Workers Union.
Because of this, Elsie Coleman, the chairperson of the portfolio committee on economic development, has asked presentations and answers to the politicians’ questions to be couched in general terms.
Reading from a statement, Pattison explained that mergers and acquisitions in South Africa are highly regulated in that they require the participation of the competition authorities, the government, and both formal and informal discussions with other interested parties, such as trade unions.
The SA Commercial, Catering and Allied Workers’ Union (Saccawu) told the hearing that while it supports foreign direct investment in the economy, such investment has to be responsible, not destructive.
Saccawu deputy general secretary Mduduzi Mbongwe claimed the merger could ultimately lead to job losses in the country.
“We support responsible foreign direct investment, [but] we must accept that not every investment is responsible. If it means the destruction of more jobs... surely this isn’t the objective of job creation in this country,” he told MPs.
The merger, which sees Wal-Mart taking a 51 per cent stake in the local retailer, was approved by the Competition Tribunal of South Africa on May 31 this year, subject to certain conditions.
Saccawu has launched a legal appeal against this approval.
In a written submission, tabled yesterday, Saccawu warns that the approval of the merger “poses a severe threat to the economic developmental imperatives” of South Africa.
It says Wal-Mart’s entry into the country is akin to a “second scramble for Africa and her resources”. Further, the facts and likely effects of the merger “warrant its prohibition on both competition and public interest grounds”.
It claims the merger will have a devastating effect on small enterprises which, it says, make up 87 per cent of the country’s more than 80 000 retail outlets.
“We currently experience threats of massive retrenchments, led at the moment... by one of the leading retailers, Pick n Pay, to shed almost 3 137 jobs.
And, in our observation, we expect further threats... as the full impact of [the] merger and Wal-Mart’s entry into the local market are brought to bear on the sector, [both] immediately and in the not so distant future.”
In a separate submission, trade union federation Cosatu also claimed job losses could stem from the merger.
“We believe very strongly that this deal hits so hard at... our government’s desire to create jobs,” Cosatu president Sdumo Dlamini told the hearing.
In a written submission, Cosatu warns the merger will have an adverse impact on jobs and conditions “in both the retail sector and in manufacturing and other sectors that feed into the supply chain to Massmart, such as agriculture, agro-processing, chemicals, clothing and textiles”.
Pattison, responding to a question on job creation, told the hearing that his company currently had 30 000 employees, and this total was set to increase by 15 000 over the next five years.
The public hearings end tomorrow. – Nampa-Sapa and I-Net Bridge