Massmart, SABS sign deal to aid SMEs

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.