Chapter 3 - Citizen Wal-Mart? South African food retailing and selling development

Summary

INTRODUCTION

In public debate throughout 2011 and much of 2012, Wal-Mart's entry into South Africa's economy sparked fierce debate. The Competition Tribunal and Competition Appeal Court processes became a match between the formidable US multinational – the world's largest private employer with some 2.1 million employees in fifteen countries2 – and what appeared to many as activist ministries within the state, fighting to uphold ‘public interest’ in its merger with Johannesburg Stock Exchange (JSE) listed Massmart Holdings, Inc., trading as subsidiaries Game, Dion, Makro, Builder's Warehouse and Cambridge Foods, among others. South African unions, most notably the South African Commercial, Catering and Allied Workers Union (Saccawu), with support from global union federation UNI Global and the US union the United Food and Commerical Workers (UFCW), put up a resolute defence against an uncomplicated and quick merger approval (Kenny 2012b).

Wal-Mart/Massmart claimed to offer cheap goods to a growing middle and working class consumer base, and as such their ‘everyday low prices (EDLP)’ would bring the majority of South African consumers, previously excluded from consumption, into participation in this market. The chief executive officer (CEO) of Wal-Mart International, Doug McMillon, wrote in an op-ed in Business Day on 26 January 2011 that the company's ‘core mission – to save people money so they can live better’ would be its contribution to South Africa. He concluded, ‘Walmart looks forward to earning our credentials as a responsible and productive citizen of SA.’

But the protracted merger approval process was to belie any easy acceptance of Wal-Mart. In its report in February 2011, the Competition Commission recommended, in what can only be acknowledged as a political misstep, that the deal be approved with no conditions. When the Competition Tribunal in March and May of 2011 rolled around, the hearings had become the terrain of battle. The state's representatives, led by the minister of economic development, Ebrahim Patel, became increasingly frustrated with the merging parties’ unwillingness to provide information or come to informal agreement over conditions for the merger. The Departments of Economic Development (EDD), Trade and Industry (DTI) and Agriculture, Forestry and Fisheries (DAFF) were concerned about the effects of Wal-Mart's entry on South African manufacturing and agricultural jobs in the context of the power of this global buyer to import through its supply chain the most competitive commodities from around the world.