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Massmart welcomes court ruling

Oct 09 2012 17:33

Company Data

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 0
Change -2,11
% Change 0
Cumulative volume 84062
Market cap 26.13bn

Last Updated: 22-10-2014 at 04:23. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Retailer Massmart Holdings [JSE:MSM] welcomed a Competition Appeal Court ruling on Tuesday which provides clarity on its supplier development fund.

"The clarity provided on the mechanics and focus of the supplier development programme is a positive endorsement of the initiative," Massmart said in a statement.

The Competition Appeal Court (CAC) ruled that Massmart should contribute R200m to a supplier development fund over five years.

Initially, Massmart volunteered to set up a R100m fund in response to concerns that its deal with United States retail giant Walmart would hurt local suppliers.

Walmart bought a 51% stake in Massmart, a deal which was approved by competition authorities subject to conditions, including the establishment of the supplier fund.

In March, the CAC ordered the establishment of a panel of experts representing the SA Commercial, Catering and Allied Workers' Union (Saccawu), the ministers of economic development, trade and industry and agriculture, forestry and fisheries and the merging parties.

These experts had to look into the best means by which South African small and medium suppliers could participate in Walmart's global and domestic value chain.

Massmart was happy that the court had decided it "has flexibility, at its discretion, to invest up to R200m over the next five years in identifying and assisting micro, small and medium suppliers that can benefit most from Massmart-Walmart's expertise.

"In this context, we agree with the CAC that the focus of the programme on upgrading skills is a more important consideration than the quantum of monies invested," Massmart said.

It said the CAC's decision "closes this chapter".

Massmart CEO Grant Pattison said: "We look forward to working with the fund's advisory board to achieve an impactful supplier development programme."

The government and Saccawu had appealed to the CAC to review and set aside the Competition Tribunal's approval of the merger.

The CAC dismissed this application and instead requested the expert report on the supplier fund.

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