Home News Wal-Mart, unions spar as S.African anti-trust hearing closes

Wal-Mart, unions spar as S.African anti-trust hearing closes

Published on 16/05/2011

Wal-Mart made pro-labour promises Monday but failed to placate South Africa's government or unions at the close of anti-trust hearings into the retailer's proposed takeover of a local company.

Lawyers for the government and the country’s politically powerful unions called on the competition tribunal in Pretoria to either reject Wal-Mart’s bid for a 51 percent stake in local wholesaler Massmart or impose conditions on the deal to protect local workers, the Sapa news agency reported.

The government also voiced concern on the $2.5-billion (1.76-billion-euro) acquisition, saying South Africa stood to lose jobs to China if the cost-cutting giant boosted imports.

Government lawyer Rafik Bhana said if Wal-Mart were a country, it would be China’s eighth-largest trading partner.

“It would be fanciful to suggest that the concerns are anything but substantial,” he told the tribunal.

In a further blow to Wal-Mart, the country’s competition commission — which in February recommended the tribunal approve the deal with no strings attached — changed its position Monday, saying the takeover should only be approved with pro-labour conditions.

In its closing argument, the commission said because of new evidence raised during the hearings it now recommended Massmart be ordered to honour existing agreements with trade unions for at least three years and reinstate 503 workers laid off last year before the deal was announced.

Unions have accused Massmart, which runs nine wholesale and retail chains with 288 stores in 14 African countries, of sacking the workers to make itself more enticing to Wal-Mart.

Wal-Mart has run into stiff resistance from South African organised labour, which accuses the company of union bashing and says the country stands to lose jobs if the deal goes through unconditionally.

The Arkansas-based retail giant sought to ease fears over job losses in its closing arguments, pledging to honour Massmart’s existing labour agreements and promising no layoffs for two years.

The anti-trust tribunal has until May 31 to deliver a ruling on the deal.