Walmart/Massmart lies and the proliferation of the use of labour brokers

The entry of Walmart into the South African and African market, through the acquisition of the Massmart, and our ongoing opposition to it has been a long process so far. On the 9th of March 2012 the Competitions Appeal Court will hand down judgment. Irrespective of whether or not we as labour are satisfied with the judgment, it will not be the end of our campaign against the entry of Walmart into our market or the general Walmartisation of the South Africa wholesale and retail sector we have witnessed throughout the sector.

Since, our engagement with Massmart, and Walmart, before and throughout the, evidence presented at the Competition Tribunal and arguments presented in front of the Appeal Court, the merging entities vehemently rubbished our concerns about the implications for labour, the trade union movement and the local economy. If we were to believe the merged entity, the only consequences that this acquisition will bring are positive, jobs, cheap consumer goods, local procurement and a positive contribution in growing our economy.

Unfortunately, real life experiences where Walmart trades are to the contrary; as already is abundantly evident since the Tribunal judgment as expressed in massive casualisation through labour brokerage from their rapid growth, acquisitions and mushrooming of stores.

We have consistently argued against the notion that the merger would have positive spin-offs, using economic arguments and demonstrating what economies of scale in the case of Walmart can do to small and local businesses that will have to compete against their (Walmart) global procurement model of cheap imports and the like. We warned against the impact that the merged entity will have on labour in the Group, in the sector and the economy in general.

We have already begun to see the impact in the sector with retrenchments and threats of retrenchments, the hardening attitudes of other players in the wholesale and retail sector as well as the near demise of small businesses that are forced to play second fiddle to Cambridge which is now springing up in areas that are traditionally the hunting ground for SMMEs.

We have warned against the implications on employment in the merged entity and we see today whilst we are still waiting for the judgment of the Appeal Court that Walmart/Massmart have gone on a massive expansion; buying up smaller players and expanding its foot print in the grocery sector through the establishment of the very Cambridge we see mushrooming all over the country. The point to make here is that when we argued that there are competition concerns by virtue of the Walmart scale, this is precisely one of the issues we contemplated.

Massmart on its own would never have been able to so aggressively expand as is now possible with the leverage of Walmart's resources. Since the Tribunal and Appeal Massmart have acquired other companies within the wholesale and retail sector, viz. Rhino Cash & Carry and the Fruit Spot.

But more significantly, what they said in meetings with us is that ;"we prefer full time permanent staff" yet what they do is the opposite. Our members report that the overwhelming majority of workers employed in all their new operations are workers sourced through labour brokers such as; Ziph' Inkomo Group of Companies Private Employment Agency, Human Impact Resources Capacity Outsourcing, VAN and Capital CMC; amongst the many.

Of course, in our experience this is a further illustration of how companies make paper commitments to the Competition authorities and shred the paper as soon as they walk out of the hearings. This is possible given the well-known but ignored reality of the Competition Commission's lack of capacity or willingness to monitor compliance and honouring of commitments on the part merging parties.

The advent of Walmart, trading in our shores poses a serious threat to job security, decent jobs, fair competition, freedom of association and the right to organise as well as workplace harmony.

It is a very serious challenge and should be confronted and fought with all our resources, for if they get away with it, they will set the standard for the rest of the sector and will surely encroach on the rest of the economy. This will breed a contaminated industrial relations environment whilst swelling the ever-growing pool of unemployment.

We have to intensify our campaign and unapologetically demand the total banning of labour brokers.

Statement issued by Mike Abrahams, SACCAWU, March 1 2012

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