Decline in local supply 'not a Massmart problem'

"I understand the argument and concerns made by the ministers that the South African manufacturing and supply industry needs to be globally competitive if we have to operate in a global environment, and it may come under pressure if it doesn't.

"What we disagree on is that we are the ones who are going to cause it. It's a global problem, it not just a South African one, and it's definitely not a Massmart problem," Pattison noted.

Economic Development Minister Ebrahim Patel, Trade and Industry Minister Rob Davies and Agriculture, Forestry and Fisheries Minister Tina Joemat-Pettersson filed an application to the Competition Appeal Court to review and set aside the acquisition of 51% of Massmart.

It is believed that government's vehement opposition to the deal, which became effective in June after receiving Competition Tribunal approval, with four voluntary conditions, has become too politicised and that the government is being spurred by the country's trade unions who believe the deal poses a threat to local manufacturing and jobs.

The review by the government departments, as well as an appeal by the SA Commercial, Catering and Allied Workers Union (Saccawu) will be heard by the Competitions Appeal Court on 20 and 21 October.

The companies meanwhile have been hard at work with the implementation of the deal.

A 12-person expatriate team is already on the ground in SA and last weekend saw the roll-out of a second every-day-low-prices 10-week promotion in line with the company's aggressive pricing strategy. The first promotion saved consumers R50 million, Massmart said.

Addressing the media at the Consumer Goods Council of SA's annual conference, Pattison said he had a strong belief and confidence in the potential local supply base, and encouraged local suppliers to work with the company to reduce costs.

As a voluntary condition to the tribunal's approval, the companies have set up a R100 million supplier-development programme that will train suppliers and establish farms to help rural farmers grow and supply fresh produce to Massmart stores.

Pattison said the African continent presented a wealth of opportunities.

"If I was the president of Africa, I would say we have the water, we have the agricultural land, if we're going to become anything in the next 20 years, I would make this the bread basket of the world," he said.