15 November 2012

Namibia: Walmart Accepts Merger Conditions

Photo: Jared C. Benedict
Wal-Mart, Texas.

Windhoek — American-based Walmart has dispatched a team from its British subsidiary, ASDA Walmart, to look at the quality of Namibia's agricultural products.

The visit is intended to culminate in a procurement deal where Walmart would be sourcing a number of Namibia's agricultural products, especially Namibian beef, for its retail chain.

"We are looking forward to the opportunities we can develop whilst visiting," the head of sourcing at ASDA Chris Brown said in a statement from Massmart-Walmart.

The visit conforms with one of the conditions upon which Minister of Trade and Industry Dr Hage Geingob approved Walmart's N$17 billion merger with Massmart in March this year.

Sourcing merchandise from Namibian suppliers will ensure that the 250 small businesses that have been supplying Massmart's retail chain shops in Namibia with services and products, are not disadvantaged by the merger. Walmart's merger with Massmaart has been subject to legal scrutiny and challenges in both Namibia and South Africa since it was announced in late December 2010.

The two countries spent the entire 2011 fighting to have the merger subjected to specific conditions such as the recognition of trade unions and the upliftiment of local producers and SMEs in the two countries.

Following a protracted legal wrangle last year the Namibian Supreme Court finally ruled that it is the Minister of Trade and Industry who has the final say to impose conditions on the merger.

Trade and Industry Minister Dr Hage Geingob has since directed that the company comply with three conditions for the merger to proceed, which includes the provision that no retrechments would take place because of the merger for a period of two years; that Walmart honour and recognise all existing labour agreements and trade unions that had agreements with Massmart prior to the merger and allow the Namibian Food and Allied Workers Union (Nafau) to bargain on behalf of Massmart employees for those two years, as well as to establish a programme to develop local suppliers.

The merged entity "shall obtain the approval of the Minister of Trade and Industry for such a programme within 12 months of the date of the determination."

The approval of the merger, according to the minister, takes effect from the date of the determination. Geingob's ruling was communicated to Walmart yesterday morning.

ASDA has been sourcing beef from Meatco for the past two years, and as part of the trip, the ASDA team will also have discussions on the possibilities of further opportunities. Brown said one of the many benefits of having Walmart in Africa has been the opportunity to work with local suppliers in helping them become more competitive by providing them with access to international markets. He said Massmart-Walmart is "aware of the many challenges facing local and emerging businesses in Africa and aims to continue focusing on including and accommodating local manufacturers and suppliers in its supplier listing." Walmart has earned itself the unenviable reputation of union bashing, unfair market practices and unfair labour practices in some of the countries it operates.

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