Government loses Walmart appeal bid

2012-03-09 10:39

Johannesburg - The Competition Appeal Court dismissed an application on Friday by three ministers who sought to review and set aside the Competition Tribunal's approval of  Walmart's R16.5bn takeover of Massmart Holdings [JSE:MSM].

The court ruled against the government’s appeal to have the deal set aside, but partially upheld a separate union appeal and said about 500 previously fired workers must be reinstated.

The ruling is likely to be seen as a victory for Walmart in its plans to expand in fast-growing Africa. It is also likely to soothe local investors, who had feared the ruling would tarnish South Africa’s reputation as a business-friendly country.

The court held in favour of the SA Commercial, Catering and Allied Workers' Union (Saccawu) that 503 workers who had been retrenched were entitled to reinstatement.

The court ordered that a study should be commissioned by three experts - representing Saccawu, the ministers of economic development, trade and industry and agriculture, forestry and fisheries - and the merging parties.

The three experts must be appointed within one month of the order, and will then have a further two months to produce a report for the consideration of the court.

It must look into the best means by which South African small and medium suppliers could participate in Walmart's global value chain and thereby ensure that benefits from the merger will flow to this important sector of the economy.

South Africa’s anti-trust regulator in May approved Walmart’s bid for 51% of discounter Massmart Holdings with token conditions. That prompted the government and the main service workers union SACCAWU to launch separate appeals.

Procedural issues

The state’s appeal centred on procedural issues during the May hearing, such as government access to Wal-Mart documents and an alleged lack of time for cross-examination.

“Neither of these arguments justified the setting aside of the Tribunal decision,” the court said in its statement on Friday.

It did rule that 503 previously fired workers should be reinstated and that the union, the government and the merging companies should set up a study on how to ensure that smaller companies can participate in Walmart’s supply chain.

The court also rejected proposals that Walmart should be forced to meet targets on local procurement.

“We are pleased that the Competition Appeal Court has recognised the public interest issues which were raised by our government,” Saleem Mowzer, special advisor to Economic Development Minister Ebrahim Patel, said after the ruling.

A handful of Saccawu members picketed outside the court where they did the “toyi toyi” dance.

“I think this is something we can welcome on the question of conditions,” Saccawu  spokesman Mike Abrahams told reporters. “The judgment says they are not satisfied with the conditions that the Tribunal has agreed upon.”

A Massmart spokesman said the company welcomed the decision.

  • Archie - 2012-03-09 10:57

    The next time stupid ministers and their communist/unionist legal advisers wast tax payers money in this way they must pay themselves.Wake up! make the lawyers work probono,no win no pay.

      Penny - 2012-03-09 11:47

      SA ministers don't know what they're doing. They don't have any business in getting involved in global business. This is a good ruling for SA and will not scare investors away.

      Peter - 2012-03-09 12:02

      This appeal was against WallMart Fashions entering the country guys!!! Have you seen those e-mail chain pics of WallMart customers in the states? OH MY GAWD!!! Giggle!

  • calliedj - 2012-03-09 10:59


  • rlong1952 - 2012-03-09 11:01

    Hmmm, how do 'make a lawyer work probono'?

  • paul.maarman - 2012-03-09 11:08

    ...ok, with that appeasing the left farce out of the way...can we now have WalMart cheaper prices -

  • Boer - 2012-03-09 11:29

    SA suppliers will not cope with the demands of being a Walmart supplier. Unions are running/ruining the supply chain and Walmart will not tolerate it at all. They force suppliers onto a lean and cost effective business and that is what the unions wouldn't like.

      appietrader - 2012-03-09 11:47

      Am sure the manufaturers will come up with a way to supply Walmart. They have survived the unions and a "hostile" government. Everybody should learn from this court ruling and move forward. The consumer will win in the end , hopefully????

  • Nosiphom - 2012-03-09 11:43

    Patel and your cronies, now get on to work and don't waste anymore of our money. At least Walmart brought in money, what about you?

      Craig - 2012-03-09 13:04

      The ministers were upset they did not get a cut of the deal to begin with. Sour grapes guys. "Joe Public" needs cheaper prices not for you to get fat wallets.

  • golda.smit - 2012-03-09 11:49

    I am glad now our country can start growing having investors in the country is really a good thing it's just some people are to stupid to actually realize that it's a good thing for our country

  • Jacqui - 2012-03-09 11:51

    Give me Walmart any day. I hope it is half as good as in the States.

  • an0nthinker - 2012-03-09 11:53

    If Walmart was smart, they'd rehire the workers with new contracts that state a probation period as it's a new company and new contract. Most companies retrench when they take over. Easier to start cleanly, that way you don't have to worry about the dishonest people.

  • Ron - 2012-03-09 11:56

    What a waste of time and money. I bought some stuff at Builders the other day which was far cheaper than anywhere else. Can only be good for us consumers.

  • Chris - 2012-03-09 12:19

    The current government has no clue how to manage this country and its challenges/opportunities. They want to reduce the number of jobless people ( which we all applaud),but they do not have a practical, workable solution or plan. That they leave business to do under very hostile and unrealistic circumstances. However when (international )business want to invest, it becomes a legal battle and red tape galore , let alone bribery and corruption.! Who will want to invest in South Africa when there are many other opportunities open in parts of Africa and other developing nations / continents? Can you imagine how well this country can do if government, with the help of business( not being the enemy !)and its hardworking citizens can get political/economic/social/technological ducks in a row. And do not give trade unions a bigger base to shout non-sensical socialist slogans from which have been mostly counter productive for the workers in particular and South Africa in general. Thank you Wallmart / Massmart for not giving up and persisting growing your business in South Africa to the benefit of all people!

  • Gail - 2012-03-09 12:21

    We on well on our way to becoming a corporation of the USA. Next thing they will decide who gets elected to government positions and who does not. Monsanto and their GM already controls 80% of Maize production, next step is to get rid of all white farmers as they have done in Zimbabwe, and the sell all farm land to offshore corporations and corporatise all farm land. Piece by piece we are selling our souls, those who made such wonderful profits out of this sale, instead of keeping the company SOuth African owned and expanding themselves, will I am sure, leave the country in the near future and their fat bank accounts with them. Wall Mart will soon lay off more staff than it employs, and will soon not support local suppliers.

  • Peter - 2012-03-09 12:50

    Walmart did not do their homework. All it needed was for them to bribe a few ANC bigwigs like JZ and his cronies, and there would have been no opposition to their purchase of 51% of Massmart.

  • Shadho - 2012-03-09 13:06

    Two of the Ministers objecting where Communists. That being the Minister of the DTI and The Minister of Agriculture who cares about the rest. OH! Take that Shoprite Group and Woolworth's and PnP you also objected to Walmart. Goes to prove the CEO's and Chair persons of the Boards could NOT influence the Government at this time ...lmao, suck it up Walmart Opposition you lose...Now Walmart should object to all the cheap imports brought in by Woolworths, Shoprite and PnP and others which are into flooding the country....lmao!! Good on you Walmart!! Teach these mickey mouse south african companies a lesson they will never forget ...LOL!

  • Walter - 2012-03-09 13:11

    Thank goodness, there is hope for lower prices and better service. Have just been in the US, enjoyed shopping at Walmart, their customer service is unbelievable! And so are their prices! And the reason the ministers appealed? Maybe not enough wining and dining and travelling (paid by Walmart)? Wonder how much this crap cost the taxpayer (you and me!)?

  • leonard.w.gray - 2012-03-09 17:24

    walmart cheaper prices - hope that will nail pick n pay, checkers and woolies scam artists.

  • Mzwandile - 2012-03-09 18:04

    Never in my life have I ever see scumbags and dump people like the contributors in this article. Many of you I bet just read the headline "Government loses..." there you are like flies bashing the govenment. Do yourself a favour go and read the article again please. Let me quote"The three experts must be appointed within one month of the order, and will then have a further two months to produce a report for the consideration of the court"is this not a victory on the side of the government because it means the court recognised the argument of the government but it need more facts an expert information. Another quote "The court held in favour of the SA Commercial, Catering and Allied Workers' Union (Saccawu) that 503 workers who had been retrenched were entitled to reinstatement" is this not another victory. Another quote "It must look into the best means by which South African small and medium suppliers could participate in Walmart's global value chain and thereby ensure that benefits from the merger will flow to this important sector of the economy." This is a most important victory for small and meduim size supplier which most of them by the way are owned by whites. Can you be so ignorant. You know an ignorant person rely on second hand information because its either he can't read or lazy to read - that define all of you because even when the government is doing something that can benefit you, you see that. I will be ashame if I were you

      Peter - 2012-03-10 05:04

      Why dont you go out and buy a business. To give you a decent return on investment you need to reduce staff.What are you going to do ?

  • Johan - 2012-03-09 23:45

    I have personally seen this before (an economic group supporting than 60 000 people with an average of 6 dependents being reduced to fewer than 20 000 i.e. a total impoverishment of 240 000 people), it's all about making money not creating jobs. Entering a protected market with a pie size only so big using your superior resources and dubious labor practices enables you to take a substantial part of the pie for yourself. It's nothing more than economic war. One economy invading another, just like in normal wars one country taking another. I challenge those who are supporting this to owe up financially in 5 years when the cards are on the table. While we are about it lets drop all import restrictions on vehicles so we can flood the market with cheap new and second hand vehicles quadrupling the number of vehicles on the road overnight overburdening out infrastructure, increasing pollution --- and o yes destroying the local vehicle manufacturing market.

  • Johan - 2012-03-09 23:54

    The Plan of Action - 1)Make sure your currency is the worlds reserve currency. 2)Now print dollars out of thin air. 3)Buy profitable businesses in other countries with thin air(Dollars). 4)If resisted depend on gobble gook and long term memory loss of human race. 5)a)Cut costs i.e. jobs in acquisition. 5)b)Ensure all purchases re channeled to yourself i.e. convert thin air into value as other currency has to produce something before it can buy thin air.(Dollars)I.e. Transfer wealth to you by using thin air. (Dollars) 6) Keep on going and make big profits out of thin air or sell off acquisition for a large profit before it collapses. That is globalization or naked capitalism.

  • braamc - 2012-03-10 15:46

    Reason why they got fired, and secondly probably no kick backs were paid to these filthy thieving ANC politicians

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