2 June 2011 | Adam Leach
South African trade unions are set to march against Wal-Mart’s acquisition of Massmart, after the deal was approved yesterday.
The bid by the US retail giant to take a 51 per cent share in the South African retailer was given the go-ahead yesterday by South Africa’s Competition Tribunal, provided certain conditions are met. But the Congress of South African Trade Unions (COSATU) said it was unsatisfied with what it called “vague” and “minimal” sanctions.
The tribunal, which was partly motivated by concerns that the new entity would source supplies from abroad, ruled that in order for the deal to go ahead the company must set up a R100 million (US$14.5 million) fund to source local products over the next three years.
The local supply fund was first proposed by Wal-Mart International CEO Doug McMillan during the initial hearing in the middle of May. He said: “We feel that these proposed commitments demonstrate our good faith and will allow us to collectively serve customers in South Africa and help them save money and live a better life.”
Unmoved by the emotive language, COSATU national spokesman Patrick Craven said it smacked of a public relations exercise.
COSATU are willing to engage with Wal-Mart over the issues (such as ongoing trade union rights), but stress that unless a satisfactory agreement is met they will take industrial action including marches, pickets and boycotts. A Section 77 notice, which enables industrial action in South Africa, has already been lodged.