Fin24

Walmart R100m fund not enough - state

2011-08-02 10:23

Johannesburg- The government said on Tuesday that Walmart's planned R100m fund to develop local suppliers is not enough to offset the impact of imports on the local economy.

Walmart recently won approval from South Africa's competition regulators to take a control of local retailer Massmart Holdings [JSE:MSM]. As part of that deal, it has agreed to the fund, as well as other conditions.

"A R100m supplier development fund could pale into insignificance given the likely impact of substantial shift to imports by the merged entity," the departments of economic development, trade and industry and agriculture said in a joint statement.

The government wants Walmart to increase the fund to R500m, Business Report newspaper said last week, citing a government source.

Walmart and Massmart have said the current appeals will have no impact their on-going implementation of the transaction.

The deal has been seen as a test for foreign investment in Africa's biggest economy, which is home to both the continent's most developed economy and some of its most militant labour unions.

 

Comments
  • samzaG - 2011-08-02 10:39

    well said, thumbs up, victory at last

  • Nick - 2011-08-02 11:05

    Government AKA ANC should not meddle in business, especially successful business.

  • Bullit@24.com - 2011-08-02 11:09

    Who does the government really think they are?, for goodness sake you've stole enough from the country, now you want to get your grubby paws on the internationals, they make me sick. If their aim is to create jobs and a better life for all, then let private enterprize be, because they are doing a hell of a lot better - than the greedy ANC government.

  • Konsoomer - 2011-08-02 11:25

    I agree R100 Million ...just not enough to go around.R500 million you can open many trust funds and secure your lifestyle.

  • Dav - 2011-08-02 11:41

    .........and in so doing ensure that there is more than enough money to plunder and steal. The ANC did not get there share in the original negotiations and that is the reason for the rather belated inquiry.

  • DW - 2011-08-02 12:50

    The deal was approved and signed off by the competitions commission. There was a whole lot of debate as to whether this would take place or not, and it was eventually given the green light. Based on this Walmart went ahead. You cannot come after the fact and tell them they have to give an additional R400m to a fund. There offer and the price they paid for the shares was calculated based on the terms at the time. Its like telling someone, after they have bought a house and taken tranfer, that you want more money as you are not happy with the deal after all. They can rightly tell the government to get lost. The time to ask for the additional money for the development trust was before the deal was finalised. Not only will the government lose this battle, but they are scaring off other potential investors into this country. Rather look at why it is cheaper to buy those imports rather than employ local people to make the products here - because the local workforce just strike continuously for higher and higher wages without any increase in productivity. It is simply CHEAPER to bring in imports. Makes the most business sense, which is why they are buying into Massmart. Walmart owes nothing to this country's economy. They are here to do business and make money. If you dont like it, you should not have signed off on the deal in the first place.

  • Craigr - 2011-08-02 14:02

    There is about 15 Million consumers out there that want the deal because it means lower prices on a lot of things. The unions only care about the lazy percentage of the 4000 jobs. Duh... The workers that really work will definatly keep their jobs. The lazy ones must go back and join the unemployed line.

  • Johnny Sober - 2011-08-02 14:08

    People - get real. When it comes to corruption, Private Sector may just make our Government look like saints.

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