Walmart shouldn’t be allowed into South Africa, according to the unions. We know that already. But the deal was approved, and the notorious retailer has already bought and paid for Massmart. A couple of months ago, three Cabinet ministers announced they were suing Walmart before the competition appeal court so that the conditions imposed on the deal will be sufficiently stringent. On Monday morning, Cosatu and Saccawu both rubber-stamped their action and promised to do their bit to pressure Massmart’s shareholders. By SIPHO HLONGWANE.
To whom exactly does the benefit of the Walmart-Massmart deal accrue?
That is the nub of the objections Cosatu has against Walmart’s presence in South Africa. We’ve heard a lot said against Walmart, but that is the bare essence of Cosatu’s objection.
When the competitions tribunal approved the deal, it said, “The merging parties contend that the merger will indeed be good for competition by bringing lower prices and additional choice to South African consumers. We accept that this is a likely outcome of the merger based on Walmart's history in bringing about lower prices. However, the extent of this consumer benefit is by no means clear - Walmart itself has not been able to put a number to this claim, only that it is likely.”
According to Cosatu, the only people who will benefit from the Walmart deal are its shareholders in America. South Africa will be much worse off for it.
Another group of high-profile objectors is minister of economic development Ebrahim Patel, minister of agriculture, forestry and fisheries Tina Joemat-Pettersson and minister of trade and industry Rob Davies. The ministers collectively appealed the tribunal’s decision, and their appeal will be heard on 20 and 21 October.
One of the respondents in the case is the South African Commercial, Catering and Allied Workers Union, and it held a press conference on 10 October so Cosatu could state its support for the ministers and its affiliate union.
Cosatu secretary general Zwelinzima Vavi said if Walmart was allowed into South Africa, and allowed to procure cheap goods and food from overseas, it would cripple South Africa’s manufacturing and productive sectors and exacerbate job losses far beyond the retail sector.
He claimed the benefits of the Walmart deal were far outweighed by the negative effects it would have on South Africa. Vavi didn’t really have any new figures with him to back his point, but did say, “There is no evidence for Walmart’s claim in the tribunal that it would create 15,000 retail jobs in the next three years,” he said on Monday. “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 local factories that currently supply Massmart.
“Local employers in the retail sector are already beginning to attack workers, as they reposition themselves for Walmart’s arrival. It cannot be pure coincidence that Pick ’n Pay plans to retrench over 3,000 workers,” Vavi said.
Other corporations that are cutting down on staff numbers in anticipation of Walmart’s arrival are Ellerines, the JD Group, Woolworths, DisChem and Metcash Africa Trading, according to Cosatu.
We should also be worried about Walmart’s effects on the manufacturing sector, Vavi said, as a growing number of imports meant the manufacturing sector would be devastated.
If the current trends continued, South Africa would become a service sector economy, something that wouldn’t be sustainable in a country with 36% unemployment, the secretary general warned.
Vavi rubbished the Democratic Alliance’s contention that Walmart’s entry into the market would inject “much-needed competition in the retail space”. He said the American corporation’s track record showed it destroyed competition.
“The DA claims that the Walmart invasion is ‘a massive vote of confidence in South Africa as a gateway to the rest of the continent’. On the contrary, it is a declaration of intent to pillage the continent of its resources, exploit cheap labour and establish a stranglehold over the retail sector throughout Africa just as they have elsewhere in the world, which in turn has lead to the worst forms of exploitation of women and children in developing countries, where suppliers had to drive down their costs to make a profit,” Vavi said.
Saccawu’s primary objective at the appeal is to block the deal altogether and, failing that, to demand that “conditions must be imposed that address the pre-merger retrenchments, the impact of the merger of workers’ conditions in the retail sector and its supply chain, and local procurement requirements to protect small, medium and micro enterprises, economic development and local suppliers”.
One of the union’s demands is for Walmart to be compelled to procure 75% of its goods locally.
If the unions don’t get what they want at the hearing, they will picket, demonstrate and strike. Vavi said they would also picket the houses of major retail sector shareholders like Raymond Ackerman, Pick ’n Pay CEO Nick Badminton and (bizarrely) Western Cape Premier Helen Zille, who they list as a major Pick ’n Pay shareholder.
However, none of this meant Cosatu was opposed to foreign investment. “As a federation, we are desperate for more investment to flow into the country. However, we insist that such investment must be mutually beneficial,” Vavi said. “Walmart’s entry must be linked to our developmental goal as a country to grow our manufacturing sector.” DM
- Government swings for productive sector over Walmart in Daily Maverick;
- Analysis: Competition Tribunal opens SA’s gates to Walmart, and not a moment too soon in Daily Maverick.