South Africa: Walmart needs to give pledges of good practices to South African competition tribunal before taking over Massmart

Unions’ motivations.  In November 2010, Walmart made a takeover bid on the Massmart African retailer.  The latter runs 308 stores in 14 African countries such as Namibia, Tanzania, Ghana, Botswana or even Mauritius.  It is considered as the 3rd biggest retailer in Africa.  After this announcement, the SACCAWU, which represents 147,000 workers in private services (trade, tourism, banking) called for a strike among 80,000 of its members, against the plan for Walmart to enter Massmart’s capital.  The three unions – SACCAWU, UNI Global Union and UFCW – therefore met to seize the South African competition tribunal on the planned bid.  They wanted Walmart to make three commitments: comply with union freedom, sufficient advantages and working conditions for its employees, and the commitment to get local products.  Unions also want (among other things): a) to ensure that the takeover won’t lead to job cuts or plant closures, b) for Massmart to commit to get a certain percentage of merchandise from Small, Medium-size and MicroEnterprises (SMME) or  businesses belonging to Historically Deprived Individuals (HDIs, namely colored men and women), and c) that the company purchased accepts the principle of “joint liability” with its suppliers, meaning that it should ensure that the buying price allows giving wages and advantages that comply with labor law.  Please note that the South African government is also concerned with obtaining commitments from the latter regarding the new growth path it wishes to promote.