Fin24

DA: Walmart outcome victory for the poor

2012-03-09 16:12

Cape Town - The Competition Appeal Court's judgment on a merger between US retail giant Walmart and local company Massmart Holdings [JSE:MSM] is a victory for all unemployed South Africans, the Democratic Alliance said on Friday.

In his judgment, Judge Dennis Davis dismissed the application by the ministers of economic development, trade and industry, and agriculture, forestry and fisheries who sought to review and set aside the Competition Tribunal's approval of the merger between Walmart and Massmart.

"This is a victory for all unemployed South Africans," said DA spokesperson Haniff Hoosen.

"The decision opens the door to massive foreign investment into South Africa by Walmart, and the many job creation opportunities that will stem from that."

It was clear from the judgment that the three ministers - Tina Joemat-Pettersson, Rob Davies and Ebrahim Patel - misunderstood the role of the competition authorities in this case.

The competition authorities were there to ensure that companies did not abuse their market power and that mergers were in the public interest.

"The ministers unfortunately attempted to use the competition authorities as a tool to further their own political agendas.

"The money spent on this appeal by the ministers has clearly been utterly wasteful."

Massmart would create thousands of jobs as it expanded with capital provided by Walmart.

Walmart would also provide local producers with opportunities to access foreign markets through Walmart's supply chain, creating opportunities for South African producers to grow their businesses.

"And most importantly, Walmart's entry into the South African market will lower the price of goods, which would benefit all South Africans, especially the poor," Hoosen said.

The judgment was welcomed by Freedom Front Plus leader Pieter Mulder, who said South Africa urgently needs foreign investments to increase economic growth and create more jobs.

A decision against the merger would have frightened away foreign investors.

Free market principles accompanied by a social conscience and regulated competition is the best solution for South Africa, he said.

Business Unity SA deputy CEO Raymond Parsons also welcomed the conclusion of the matter.

The court successfully balanced the need to project South Africa as an investor-friendly economy, while simultaneously addressing the concerns around job losses and the role of small and medium suppliers.

"It remains essential, if South Africa is to attain its growth and development goals, to make the country a destination of first choice for foreign investment and for such investors to feel welcome," Parsons said.

Comments
  • Jeffrey Mangz Longwe - 2012-03-09 18:15

    why! no applause for the ANC government? goes to show

      Fourhundredkg - 2012-03-09 19:21

      Hu?

      Piet - 2012-03-09 19:37

      what you on about? The ANC was against this because no cadre will benefit....

      wynand.meyering - 2012-03-10 16:57

      One applause for every five critical errors.

  • thomas.robbertse - 2012-03-09 18:16

    This is truly good news! It is about time for real market forces in the economic world to come into play. The idiologies of African politicians should start changing towards the well being of the man in the street and no longer be focussed on political personal gain. Once again it shows that our justice system is maturing into the right direction and not being dictated to. Well done, we applaud you!!

      Jason - 2012-03-10 12:55

      Fool you just letting China steal your economy.

  • Mantsho - 2012-03-09 20:10

    Only DA cares about job creation, while ANC cares about enrichment.

      Utopian - 2012-03-10 13:17

      Spot on Mantsho. At least you see the truth. The DA will turn to enrichment also if they ever govern, of course, that is the way of government. But the ANC excell at it.

  • Nolan - 2012-03-09 20:10

    Walmart wants into South Africa because labour is cheap. Look at the many class action lawsuits against Walmart - they keep costs low because they keep expenses low (read - low wages and huge pressure on suppliers). So, while there may be an increase in jobs created now, what about the jobs that will be lost over time by the suppliers who can't afford as many workers, or the competitive retailers who have lost business.

      Mzwandile - 2012-03-09 20:48

      Spot on Nolan. Walmart throughout the world is known of its bad employment practices which include explotation of workers and secondly its a myth that there will be thousand of job opportunities. Their service system is technology driven and cut out manpower to reduce costs. Does the DA has a new spokeperson or they trust their affirmative action spokeperson to speak eloquently on this subject?

      Utopian - 2012-03-10 13:15

      SA labour cheap? Per unit produced? You have to stop smoking those socks, there is something untoward in them.

  • Terrence.dejager - 2012-03-09 23:01

    SA has pretty good labour laws but a large unemployment problem. Walmart will contribute jobs and operate within labour law guidelines. If they don't they'll end up in court and that's bad for business. The value of the monetary investment, job creation and strength of our laws reduces the potential risk dramatically. There is a (re)growing agri industry, Walmart will create a new destination for product, our farmers will respond and eventually subsidies should increase. bigger picture, it's all gravy. Also it seems Walmart is actually one of the few US based supermarkets that seems to be responding positively to pressures for providing organic and non-GM product.

      Jack - 2012-03-10 01:16

      Highly unlikely - Walmart will look to find loopholes and exploit them to the max. They're a business, which means they're here to make money - not jobs. Say good bye to Pick n Pay & Shoprite Checkers...

  • Mo Ebrahim - 2012-03-10 07:52

    Creating jobs is all well and good for our country,but what's the use if most of our people don't want to work.we a country that thrives on hand outs and before jobs are actually created we need people that are in the current work force to actually appreciate their jobs.we have way too many lazy people.and the mentality is completely wrong.many of them are screaming for jobs but how many of them keep and go on to take advantage of the opportunities that are granted to them.ewhat it comes down to is that the problems this country has is more than unemployment and narrowing the gap between rich and poor but more trying to change the mindset and mentality of its people.the main challenge to me.

  • Joey - 2012-03-10 12:03

    The Walton family business model is clearly successfull,what people forget is that small and medium independant business will suffer.Wallmart offer a cheap alternative mostly mass produced in China ,they often close down hardware stores and small shops like that.I am not excited about there foray into Africa,they pay there staff poorly and have very questionable social responsibility standards.

  • Utopian - 2012-03-10 13:13

    The lily-livered South African business community are bullied by the ANC and ANCYL. Obviously government is very worried that Massmart may be a little harder to intimidate, since they're larger than the whole SA economy.

  • Dave - 2012-03-10 16:12

    Walmart only worry about walmart, not job creation or anything else.

  • Ninon - 2012-03-12 07:58

    Lets face it -the expensive challenge by these Govt Ministers was on behalf of the communists in the ANC and Cosatu. Their narrow views on investment don't benefit the poor.

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