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S.African anti-trust tribunal begins Wal-Mart hearing

The South African anti-trust tribunal began hearings on Monday into Wal-Mart’s proposed takeover of local wholesaler Massmart, with unions set to present their objections to practices by the US giant.

“We have prepared a clear case that shows that Wal-Mart has a history around the world of suppressing union and worker rights,” said Christy Hoffman of UNI Global Union.

The worldwide union federation has joined local labour unions in voicing concern over the deal, arguing that the giant US retailer, which is known for its cheap prices, would undermine workers’ rights.

“In countries where the company has not been legally obligated to accept a union, like the United States and Canada, it has brutally suppressed all of workers’ organising attempts,” said Hoffman in a statement.

“Even in countries where it was forced to accept a unionised workforce, Wal-Mart has been attacking their rights every chance it gets.”

Massmart’s shareholders in January approved Wal-Mart’s $2.5-billion (1.87-billion-euro) offer for a 51 percent stake in the firm.

One of the conditions set by Massmart shareholders was to allow the company to remain listed on the Johannesburg Stock Exchange (JSE).

Wal-Mart scaled back the deal after initially offering $4.2 billion for a full takeover of Massmart, which runs nine wholesale and retail chains with 288 stores in 14 African countries.

The Arkansas-based company is keen to get a foothold in Africa, continuing an aggressive expansion into emerging markets as its US sales have slowed.

International net sales leapt more than 12 percent last year, leading a 6.3 percent rise in profit to $15.3 billion even as US sales dropped in the fourth quarter, the company reported in February.

“According to Wal-Mart, its rationale for entering into the transaction is a desire to be in emerging markets, especially South Africa and the sub-Saharan region,” the South African Competition Tribunal said on its web site.

“Wal-Mart believes South Africa is a key market for growth, accounting for approximately 20 percent of consumer spending on the African continent as a whole.”

The companies need approval from the tribunal to go ahead with the deal.

In March, the hearing was delayed after the government asked for more time to file an expert report on the merger.

The hearing is set down for May 9-16.