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11 October 2011 | Angeline Albert
US retailer Wal-Mart should allocate at least 500 million rand (US $63.9 million) to procurement with South African suppliers, a trade union federation in the country has said.
Wal-Mart finalised its purchase of a majority stake in the retailer Massmart in June and pledged to spend 100 million rand (US$14.1 million) on local procurement over the next three years. However, three government departments and a union (the South Africa Commercial, Catering and Allied Workers Union (SACCAWU)) have appealed for further concessions on domestic procurement.
In a joint press statement issued yesterday, the Congress of South African Trade Unions (COSATU) and SACCAWU demanded a guarantee that Massmart will not decrease its domestic procurement as a result of the merger.
COSATU said unemployment in the country is currently 36 per cent and the merger would damage South Africa’s retail, manufacturing and chemical industries as well as other sectors which feed Massmart’s supply chain.
The statement said: “In South Africa this won’t just mean a threat to the future of big retail shops such as Shoprite and Pick n Pay but all SMMEs [small, medium and micro enterprises]. Already small shops operating in the townships that used to be owned by blacks have been taken over by foreign nationals.”
Economic development minister Ebrahim Patel, trade and industry minister Rob Davies and agriculture, forestry and fisheries minister Tina Joemat-Pettersson filed an application to the Competitions Appeal Court (CAC) to review the merger put a stop to Wal-Mart's proposed acquisition of 51 per cent of Massmart. The government review and SACCAWU’s appeal will be heard by the CAC on October 20/21.
Patrick Craven, a COSATU spokesman said if the merger went ahead there must be: “Local procurement requirements to protect SMMEs, economic development and local suppliers.”