Joint press statement by the Economic Development Department, the Department of Trade and Industry and the Department of Agriculture, Forestry and Fisheries on the Walmart/Massmart merger
2 Aug 2011
Government has noted the media reports and editorials regarding its application for the review of the Competition Tribunal's decision on the Walmart/Massmart merger. It is important to put Government's position into perspective.
Government's review application points to serious flaws in the Tribunal's process, including the inadequacy of the Tribunal's order relating to discovery (the Tribunal allowed only some of government's requests for information) and prejudice caused by limitations imposed on the time allowed for witnesses to make oral submissions and also the number of witnesses allowed (the hearings process).
Government has set out in its papers why these defects affected the ability of the Competition Tribunal to properly consider the potential damage of the merger and to impose appropriate conditions to mitigate the risk.
The main risk to South Africa that the merger poses is an increase in imports by Walmart/Massmart, causing a decline in local manufacturing and production, across a wide range of consumer products including in agro-processing, the furniture industry, electronics, plastics and household goods as well as clothing and textiles. These effects, if realised, will lead to the closure of a number of local businesses and local job losses.