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News : Walmart gets the green light

South Africa’s consumers will soon have the benefit of a new player in the retail space, although the jury is out on what it will mean for workers in the long term.
The Competition Tribunal on Tuesday gave US retail giant Walmart the go-ahead to complete its controversial merger with local company Massmart, worth an estimated $2.4 billion (R16.3bn).

Trade unions and the departments of economic development, trade and industry and agriculture had opposed the deal, arguing that it would lead to job losses and put local suppliers out of work.
The tribunal imposed conditions on the deal, including the creation of a R100m fund to develop local suppliers, no merger-related retrenchments for a period of two years and continued recognition of the South African Commercial, Catering and Allied Workers’ Union for three years after the merger.
Walmart sees the deal as a stepping stone for expansion into Africa - a process that will bring additional benefits to South Africa.
There may also be positive spin-offs for shoppers in terms of lower prices.
In Durban, workers at Game and Makro shops and offices were buzzing with the news on Tuesday.
“Everyone was talking about the Walmart deal today in the store, both the staff and our customers. We knew it was coming, but now that it’s almost final, while some staff are excited, others are also concerned about the future and changes in the company,” said one employee at Game’s City View shop.
“There was more excitement from our customers, who were asking us about the deal and when prices were going to come down,” said another.
“For me, Walmart taking over is not such a big thing. It does not matter who runs the business as long as I have my job,” she said.
An employee at the Makro Springfield shop said:
“We heard the news on TV in-store and from managers and people talking about it being approved. I believe it’s going to be good for us and customers.
“Many staff who had shares in the company were asked to sell some of their shares to accommodate the Walmart deal. We got the shares for nothing after working for a number of years for Massmart, so we did not mind selling them back and making some money,” he added.
An employee of Massmart’s Mass discounters headquarters in Durban, which runs Game and DionWired shops, said the announcement was sent via email to office employees on Tuesday.
“Most staff were excited, but some were worried about what’s going to happen with the possibility of retrenchments after two years. Already some 500 Game staff were retrenched last year, but the company statement did say that those staff who lost their jobs would be prioritised if employment opportunities came up. I guess we will have to wait and see,” he said.
Both the Durban Chamber of Commerce and Industry and the Pietermaritzburg Chamber of Business hailed the approval of the deal, saying it was good news for the economy and consumers.
“This is clearly better than no deal, considering the positive effect that Walmart’s entry into the SA market is expected to have as far as consumers and competition are concerned,” said Durban chamber CEO Andrew Layman.
Pietermaritzburg chamber CEO Melanie Veness said: “The deal will see consumers expected to benefit from lower prices… It is also encouraging to note the commitment to no job losses for two years and the R100m for development of local suppliers.
“What is not clear is how their procurement policies will impact on their commitment to support local suppliers.” - The Mercury

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Tags: and   Makro   Game   Walmart   DionWired   Massmart  

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