Walmart in South Africa

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Walmart in South Africa

The beast in the bush
A hungry predator stalks Africa
Feb 17th 2011 | JOHANNESBURG | from the print edition
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Actually, I do care about prices

ON FEBRUARY 11th the world’s most successful retailer came a step nearer to establishing a presence in Africa. South Africa’s Competition Commission approved Walmart’s proposed acquisition of a 51% stake in Massmart, a South African firm that owns 265 wholesale and retail stores in South Africa and 25 more in 13 other African countries. Massmart’s shareholders love the 16.5 billion rand ($2.3 billion) deal: 98% of them voted to approve it last month. But South African unions view it like a charging rhino in a narrow alley.

The American giant will bash unions, cut wages and drive more humane employers out of business, shop stewards predict. They also fear that it will source cheap products from China instead of buying locally. Mere talk of the merger has already destroyed “thousands of jobs”, they claim, by forcing other South African retailers to lay off workers and make working conditions worse in preparation for the great American onslaught. The Congress of South African Trade Unions, South Africa’s biggest union group, has threatened to stage “the mother of all boycotts” of Massmart products and a strike at all its stores if Walmart takes over. The Competition Commission is sceptical of the unions’ claims. It said it had received assurances from the merging parties that they would honour existing union agreements, abide by South Africa’s tough labour laws and source most of their products locally. Massmart insists it has no plans to make any lay-offs. On the contrary, it says it plans to open 54 new stores (net) over the next three years and add 6,300 new hires to its 27,000 employees. Further objections from South African unions and others will be heard by the Competition Tribunal, another official body, next month. It, too, is expected to rule in favour of the deal. Related...
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