Unions continue to stoke Massmart takeover dispute

23 December 2011

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30 December 2011 | Adam Leach

The Congress of South African Trade Unions (COSATU) has continued its campaign against retailer Wal-Mart in its end of year message.

The trade union federation is fighting with the US supermarket chain over its takeover of the South African retailer Massmart. Despite Wal-Mart’s commitment in June to set up an R100 million (US$14.5 million) fund to source local products when the takeover went through, COSATU said it was unhappy, calling the retailers offering “vague” and “minimal”.

In his end of year address Zwelinzima Vavi, general secretary of COSATU, praised the launch of local procurement legislation and reiterated COSATU’s commitment to fighting corruption in the country, but paid special attention to the takeover dispute.

“We remain adamantly opposed to the invasion into Africa of the world’s biggest company, which has a terrible industrial relations record. Its entry into other countries has led to massive job losses, as it compels all retailers to adopt its own cut-throat tactics in order to compete and survive.”

Wal-Mart strongly denied the accusations in a statement to SM. “Throughout the Massmart acquisition process, Walmart has continually emphasised that we will recognise, honour and respect current union relationships and we remain steadfast to that commitment: we have always believed that the unions as very important stakeholders. This isn’t at all about job losses at Massmart...it is simply not being contemplated. Since the conclusion of the acquisition, plans have been underway to create 15,000 new jobs in the next five years at Massmart alone.”

It added: “Our acquisition history shows that we respect and honor pre-existing union relationships and contracts; and we actively implement work environments with our founding principle of ‘respect for the individual’.”

Vavi went onto to highlight the importance of the Local Procurement Accord, which aims to create an extra five million jobs by 2020 through ensuring contracts go to local businesses. But claimed the merger between the retail firms would mean cheap imports, factory closures and damage to domestic manufacturing.

Wal-Mart said its policy is to purchase locally “wherever possible and feasible in South Africa”, and that by 2016 the company expects to source R60 billion (US$7.3 billion) of primarily agricultural products from the country for its global supply chain.

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