Johannesburg - Massmart Holdings [JSE:MSM] and the SA Bureau of Standards
(SABS) signed an agreement on Tuesday to help small businesses improve their
product quality.
"The Consumer Protection Act (CPA) that came into
effect in April 2011 fuelled the initiative," Massmart Holdings CEO Grant Pattison
told media in Johannesburg.
"We recognise the opportunity to develop our local
supplier base while ensuring safer, higher quality products for our
customers."
The deal covered three areas, said SABS commercial executive
Sylvester Ratlabala. The SABS would conduct quality audits on suppliers to
Massmart's value chain.
It would also test products on Massmart's shelves to ensure
they meet the required standards
The SABS would provide training to Massmart's suppliers -
particularly small and medium enterprises (SMEs) - on meeting standards.
"The goal is to ensure that SMEs that supply to
Massmart's chain have quality products that can be competitive," said
Ratlabala.
Pattison said new regulations, such as the CAP, had
unintended consequences as complying with the new requirements increased producers'
costs.
At the moment, complying with the required standards could
cost between R35 000 and R90 000 and was a lengthy process.
In terms of this agreement, a simplified, cheaper approach
would be used.
"It's not a standard of low quality, just simplification,"
said Pattison.
United States retail giant Walmart acquired a controlling
stake in Massmart earlier this year, after the Competition Tribunal approved
the deal with conditions.
One of the conditions, volunteered by Massmart, was to
create a R100m fund to spend on a local supplier programme over the next three
years.