Wal-Mart bid recommendation disappoints Sactwu

"We have made submissions 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," Sactwu said.

At the weekend, Massmart said it and Wal-Mart had been notified that the Competition Commission had concluded its investigation and had referred Wal-Mart's proposed acquisition of 51% of Massmart's equity to the Competition Tribunal with a recommendation that the transaction be approved without conditions.

The next step in the approval process would be the Competition Tribunal hearing, followed by its ruling on the transaction, Massmart said.

Opposition submission

Sactwu said that, in its submission to the commission, it provided international examples of Wal-Mart's past practices and business methodologies to show that, if the merger was approved, it would reduce competition in the retail and manufacturing sectors, cause retrenchments and factory closures at Massmart's South African suppliers and its competitors' suppliers, and negatively affect broad-based black economic empowerment (B-BBEE).

"We provided the commission with further examples where Wal-Mart, often acting alone and sometimes with other retailers, were found guilty of, or were suspected of, participating in unlawful anticompetitive practices, including in Germany, Wisconsin in the US, and Costa Rica," the union said.

Sactwu said it believed that Wal-Mart would make changes to Massmart that would negatively affect employment in Massmart itself and in Massmart's South African suppliers.

"Then, when other South African retailers increasingly mimic Wal-Mart's behaviour, it will negatively affect employment at these retailers' local suppliers as well. We will now use the forthcoming Competition Tribunal hearings to make the case that this merger should be prohibited," it said.