Government explains its stance on Wal-Mart/Massmart merger

By Khanyisa Tabata
02 August 2011

Government remains opposed to the proposed Wal-Mart/Massmart merger until it gets concrete, binding assurances on job security for Massmart employees.

It also insists on an undertaking to promote local production and manufacturing. Addressing a news conference at the Union Buildings in Pretoria, Economic Development Minister Ebrahim Patel said government intervention to stop the merger was not based on the nationality of Wal-Mart.

Key national principles to encourage local production must, however, be supported in any transaction.

Meanwhile, Agriculture, Forestry and Fisheries Minister Tina Joemat-Pettersson says the proposed merger should be viewed in the context of South Africa’s economic position.

She says although government has failed to subsidise agricultural production, allowing the merger to go ahead could be a deadly blow to local commercial farming.

This is because the new entity with its financial muscle could rely on its international supply-chain networks, forcing its competitors to neglect local production.