Johannesburg - South African farmers are yet to realise what
the Walmart/Massmart Holdings [JSE:MSM] deal is doing to do to them, according
to Agriculture Minister Tina Joemat-Pettersson.
The minister raised her concerns with City Press shortly
before Cosatu general secretary Zwelinzima Vavi announced that the labour
federation was supporting the South African Commercial, Catering and Allied
Workers Union’s Competition Tribunal appeal against its approval of the
Vavi had also supported the ministries of economic
development, trade and industry, and agriculture’s call for a legal review of
the May 31 tribunal decision.
This was based on the fact that it had unreasonably denied
government departments access to information in the possession of the merging
parties and took a far too narrow view of the merger.
Joemat-Pettersson said: “We are so apprehensive about the
Walmart/Massmart intervention because if you bring cheap food into the country
it is going to underscore and put our local farmers under so much pressure.”
She added that if farmers ever thought that cheap inputs
elsewhere were jeopardising the industry, “give us Walmart/Massmart and you
will see what it is going to do to agriculture in this country”.
She further said: “I don’t think commercial farmers have
thought about it carefully.
“They sell food very cheaply for the first, second, third
year. Their prices are so reduced that they put your Pick n Pays and
Shoprite/Checkers out of business.
“Once they have the monopoly after four, five years all
their prices will shoot up,” said Joemat-Pettersson.
By then South African production prices would not be able to
meet Walmart’s requirements, meaning the company would “import from the
cheapest Chinese, from the cheapest Vietnamese, the cheapest Taiwanese farmers,
the subsidised farmers”, the minister said.
“Cheap subsidised agricultural products will flood into our
country and I don’t think our farmers have thought about it. Yes, they say they
will procure locally, but not everything,” she said.
According to her, this emerged from an SMS she received from
a local olive farmer who had supported her concerns, saying: “I contacted them
but they say they are going to import their olives and olive oil and not make
use of us because they buy cheaper overseas.
“This will mean that the community projects we are involved
in will not be taken up by them. They don’t even want to talk to us.”
According to Vavi, the Competition Act required the tribunal
to consider the competition and public-interest effects of a proposed merger –
whether it promoted employment and advanced the social and economic welfare of
South Africans – and not just the narrow interests of the firms who intend to
The merger’s initial conditions of approval included that it
set up a R100-million supplier development fund to help local producers, that
there should be no merger-related redundancies for two years, and that the
company must honour existing union agreements for three years.
Walmart has consistently tried to allay fears raised by
unions and government by promising 346 new stores across Africa, which would
create thousands of new jobs.
It has also announced that it planned a 50% increase in
Massmart’s food business.
This week, Vavi said: “Cosatu insists that the application
needs to be judged against the background of the job-loss bloodbath which has
hit the country in recent years.”
Unemployment stood at 36.6%, and the labour market had been
depressed for so long that many unemployed people were no longer looking for
There was no evidence to back Walmart’s claim in the
tribunal that it would create 15 000 retail jobs in the next three years.
“And any such jobs could be more than cancelled out by the
tens of thousands of jobs that could be lost in other local retailers and the
local factories that currently supply Massmart,” said Vavi.