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2011-05-03 by Business Report — last modified 2011-03-04 13:10 MASSMART ’s reluctance to make tangible commitments regarding issues of public interest including procurement and food security had forced the government to intervene in the proceedings of the merger with Walmart, the Department of Economic Development said yesterday.
"The Competition Commission, in recommending the approval of the Walmart-Massmart merger, made its recommendation on the premise and expectation that the merging parties would make commitments with respect to a number of public interest considerations," the department said.
The Competition Commission last month recommended that Walmart’s planned R16,5bn purchase of a 51% stake of Massmart go ahead without conditions.
Massmart and Walmart had delayed making solid commitments about issues such as labour matters and job losses, local procurement and food security, the department said.
The statement follows a submission the department made to the Competition Tribunal on behalf of itself, the Department of Trade and Industry and the Department of Agriculture, Forestry and Fisheries.
The timing of the response and the inadequacy of the information provided by Massmart and Walmart on some of the issues was a concern, the departments said in the submission.
It also said that Massmart and Walmart had painted the merger in a more positive light than was the case.
"The original information referred to direct imports of only 3,35%, whereas a full reading of the document suggests the total import content in fact amount to a possible 64% for general merchandise and 10% for food."
Although Massmart had said it would not switch procurement from locally manufactured to imported products, it later said "it was not open to negotiating the matter", the submission read.
The department also said if the deal was not properly regulated it would undermine the New Growth Path.
The department had appointed a facilitator to engage interested parties, it said.
"The aim of this facilitation is to explore the areas of concern and to ensure that the public interest concerns are dealt with."
Massmart yesterday said it was unable to comment on submissions made by individual groups to the competition process.
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