14 April 2011 | Lindsay Clark
Retail giant Wal-Mart has promised to offer South African suppliers opportunities in its global supply chain if its proposed acquisition of supermarket Massmart is successful.
Wal-Mart said it would be “sensitive” to local vendors after a government official voiced fears about cheap imports damaging the South African economy if the merger takes place. The impact of the potential takeover - announced last year - is in the public eye during the build up to a Competition Tribunal hearing on the subject, due to begin on 9 May.
In an interview with South African newspaper Business Day last week, Lionel October, acting director-general of the Department of Trade and Industry, said he was not against foreign investment but had ask the Tribunal to consider local sourcing as a matter of public interest.
October said he had raised the matter in response to concerns about the impact on local manufacturers, if Wal-Mart choses to contract with foreign suppliers rather than sourcing locally. "[Chinese vendors] have such economies of scale that they can displace domestic suppliers. This has a systemic impact on the country," he said.
A statement from the retailer said it appreciated October’s statement that the government’s recent actions do not signal opposition to foreign investment in South Africa.
“We share the need to be sensitive to the local supply chain, and we are committed to working closely with local suppliers, expanding opportunities for them to source Massmart as well as Wal-Mart’s global supply chain,” the statement said.
“We have a global track record of working directly with small farmers to increase their income and help them become more sustainable, and plan to bring those practices to South Africa as well,” the statement added.