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Unions warn of job losses in Walmart-Massmart merger

The South African Commercial, Catering and Allied Workers’ Union (Saccawu) says that while it supports foreign direct investment in the South African economy, such investment has to be responsible, not destructive.

Speaking on Wednesday during public hearings at Parliament on the R16.5-billion takeover of Massmart by United States giant Walmart, Saccawu deputy general secretary Mduduzi Mbongwe claimed the merger could ultimately lead to a loss of jobs in the country.

“We support responsible foreign direct investment, [but] we must accept that not every investment is responsible.

“If it means the destruction of more jobs … surely [this] isn’t the objective of job creation in this country,” he told MPs attending the second day of hearings, hosted by the economic development portfolio committee.

The merger, which sees Walmart taking a 51% stake in the local retailer, was approved by the Competition Tribunal of South Africa on May 31 this year, subject to certain conditions.

Saccawu has launched a legal appeal against this approval.

Prior to the three-day hearings resuming on Wednesday, the chairwoman of the portfolio committee, Mmathulare Coleman, again warned those present not to dwell on the tribunal’s ruling and conditions, noting these were the subject of an appeal.

In a written submission, tabled on Wednesday, Saccawu warns that the approval of the merger “poses a severe threat to the economic developmental imperatives” of South Africa.

It says Walmart’s entry into the country is a kin to a “second scramble for Africa and her resources”.

Further, the facts and likely effects of the merger “warrant its prohibition on both competition and public interest grounds”.

It claims the merger will have a devastating effect on small enterprises, which, it says, make up 87% of the country’s more than 80 000 retail outlets.

“We currently experience threats of massive retrenchments, led at the moment … by one of the leading retailers, Pick n Pay, to shed almost 3 137 jobs.

“And, in our observation, we expect further threats … as the full impact of [the] merger and Walmart’s entry into the local market are brought to bear on the sector, [both] immediately and in the not so distant future.”

In a separate submission, trade union federation Cosatu also claimed job losses could stem from the merger.

“We believe very strongly that this deal hits so hard at … our government’s desire to create jobs,” Cosatu president Sdumo Dlamini told the hearing.

In a written submission, Cosatu warns the merger will have an adverse impact on jobs and conditions “in both the retail sector and in manufacturing and other sectors that feed into the supply chain to Massmart, such as agriculture, agro-processing, chemicals, clothing and textiles”.

Massmart CEO Grant Pattison, responding to a question on job creation, told the hearing that his company currently had 30 000 employees, and this total was set to increase by 15 000 over the next five years.

The public hearings end on Thursday, July 21. — Sapa

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Richard Davies
Guest Author

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