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CTFL sector may suffer from Walmart merger, SACTWU
17
May '11
The Southern African Clothing and Textile Workers' Union (SACTWU) has been a participant in the Competition Tribunal hearings dealing with the large merger between Walmart and Massmart.

The union is concerned that the merger will have significant negative effects on both employment in the manufacturing sector and on South Africa's reindustrialisation program.

In the closing arguments heard before the Tribunal, SACTWU's legal team argued that the merger could result in a substantial hollowing out of the SA manufacturing sector, including the clothing, textile, footwear and leather (CTFL) sectors.

SACTWU's legal team highlighted this fact by referring to evidence from the United States and Mexico, pointing out that in these economies Walmart's import volumes were so substantial as to be noticeably detrimental to local employment. SACTWU voiced concern that this may happen in SA as well.

SACTWU's legal team also argued that the possible benefits from the proposed merger will severely negate the total the cost of the merger to the economy, including increasing job losses and accelerating decline in local production and capacity.

SACTWU's legal team also pointed out to the Tribunal the contradictions in the merger parties' witness statements and the evidence they had submitted to the Tribunal. In the witness statement the merger parties admitted that there may well be a negative impact in the manufacturing sector but before the Tribunal this fact was constantly denied. SACTWU believes this was done to ensure approval of the merger and allay the fear of the merger's impact on the manufacturing sector to the union and the Tribunal.

SACTWU urges the tribunal to prohibit the merger. However, in the event that the merger is approved, it must be done only with binding and enforceable conditions to deal with the negative impact on the manufacturing sector.

Any such condition would need to deal with the impact of increased imports and the subsequent reduced demand for locally manufactured products. Any commitment that does not do this, will not address in significant way the public interest concerns that are created by this merger.

Southern African Clothing and Textile Workers' Union (SACTWU)

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