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DA: Walmart outcome victory for the poor

Mar 09 2012 16:12 Sapa

Company Data

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 130.31
Change -0.46
% Change 0.00
Cumulative volume 240754
Market cap 28.29bn

Last Updated: 01/09/2014 at 04:27. Prices are delayed by 15 minutes. Source: McGregor BFA

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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.

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