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Wal-Mart bid approval disappoints SACTWU

16
Feb '11
The SA Clothing and Textile Workers' Union (SACTWU) notes with deep disappointment the reports that the Competition Commission has recommended the unconditional approval of the Walmart/Massmart merger.

We have made submission to the Commission, suggesting that the merger should be prohibited as it cannot be justified on public interest grounds and would give rise to a substantial lessening of competition. We are disappointed that our cautions appear not to have been accepted by the Commission.

In our submission, we provided international examples, including from the United States, Germany, Mexico, Brazil, Costa Rica and Guatemala of Walmart's past practices and business methodologies to show that this merger, if approved, will
• reduce competition in the retail and manufacturing sectors,
• cause retrenchments and factory closures at Massmart's current South African suppliers and its competitors' suppliers, and
• negatively affect broad-based black economic empowerment.

We provided the commission with further examples where Walmart, often acting alone and sometimes with other retailers, were found guilty of or were suspected of participating in unlawful anti-competitive practices, including Germany, Wisconsin, US and Costa Rica.

SACTWU believes that Walmart will effect changes to Massmart which will negatively impact employment in Massmart itself and in Massmart's South African suppliers. Then, when other South African retailers increasingly mimic Walmart's behaviour, it will negatively affect employment at these retailers' local suppliers as well.

In our submission, we debunked the myth that Walmart's low prices only constitute a benefit. We cited several studies to show that there is a serious social and economic cost, including lost jobs, reduced wages and benefits, increased reliance on state welfare, an increased and unbalanced trade deficit and even health concerns, to such low prices which outweighs possible benefits.

While extremely disappointed with the Commission's findings and recommendation, we will now use the forthcoming Competition Tribunal hearings to make the case that this merger should be prohibited.

SA Clothing and Textile Workers' Union (SACTWU)


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