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African unions team up against Walmart

Jul 27 2011 19:02 Reuters

Company Data

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 136.01
Change 5.51
% Change 0.04
Cumulative volume 210802
Market cap 29.53bn

Last Updated: 24/04/2014 at 04:28. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - A global labour federation plans to bring African unions together to battle the expansion of US retailer Walmart on the rest of the continent, a senior group member said on Wednesday.

Walmart paid R167.5bn for 51% of South African retailer discount Massmart Holding [JSE:MSM] in a deal that was finalised last month but is being appealed by the government and some unions.

The deal gives Walmart a substantial presence in Africa’s top economy and exposure to at least a dozen other countries. South Africa’s unions and three government departments have opposed the acquisition, saying it will squeeze local manufacturers and spark job cuts.
 
“Walmart is now going into 14 African markets. We have an anti-Walmart alliance of unions globally, now we will have an African branch for this alliance,” Phillip Jennings, general secretary of UNI Global Union said.
 
Jennings also said UNI Global was backing South Africa’s service workers union and the government departments who are currently appealing the decision by anti-trust regulators to let the deal go through.
 
South Africa’s competition regulator imposed minimal conditions on the transaction, such as requiring Walmart to set up a R100m  fund to support local suppliers.
 
“It was much too premature for Walmart and Massmart to start dancing in the streets and organising victory parades because the legal process in this country is not complete,” Jennings said.

The government is not aiming to overturn the deal, but to impose tougher conditions and specific penalties if Walmart does not stick to the conditions, a South African newspaper said this week.
However, competition law experts have said any government appeal will have little legal basis.
 
The government had argued the competition authorities should impose targets for using local suppliers on Walmart. Without such targets, they argued, the deal could lead to lost revenue and jobs for local manufacturers.
 
But imposing such targets could also mean a breach of international trade rules, experts have said.
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