Press statement by FAWU on announced Agreed Approach between ABInbev and RSA Government as represented by EDD relating to the Transaction of SABMiller’s takeover by ABInbev
14 April 2016
The Food and Allied Workers Union (FAWU) notes the Understanding, referred to as Agreed Approach, reached between the Republic of South African Government, as represented by the Economic Development Department led by Minister Ebrahim Patel, and the ABInbev Global Executive, with Mr. Carlos Brito as a lead in his capacity as Global Chief Executive Officer (GCEO), on the takeover of SABMiller by ABInbev later today in the afternoon of 14th April 2016.
We summarize the pillars as below an assume some four broadly five areas of agreed approach FAWU wish to react as follows
- Jobs Security and Jobs Retention
- Localization and R1 billion Fund
- Zenzele ESOP Scheme and BBBEE
- Micro-Breweries and Craft Beer-Makers
1. Jobs Security and Jobs Creation
FAWU welcomes the undertaking that the net aggregate from this transaction will not result in job losses but we will insist that, though the merging entities are undertaking not to embark on involuntary job losses, there should not be incentives to and enticement of job losses by a way of “lucrative” voluntary severance packages (VSPs) and this must feature in conditions/remedies.
Otherwise, FAWU will roll out mass action throughout the country and enlist support from the rest of the world in both SABMiller and ABInbev workforces all over the world from fraternal and sister unions affiliated to the International Union of Food Workers (IUF) and outside.
2. Localization and R1 billion Fund
FAWU welcomes the R1 billion Fund meant to improve access to and participation by small-scale, and historically disadvantaged, players in the value-chain of the beer industry; from farmers of ingredients needed in, packagers of, and wholesaling and retailing on those merged entity’s products.
We, however, remain concerns that jobs in the supply-chain may be negatively affected should ABInbev leverage on its global supply-chain and its portfolio brands somewhat when it comes to procurement and other related policies or practices.
3. Zenzele Scheme, ESOP and BBBEE
If there is one thing FAWU will insist on, this will be on the Zenzele/Employee Ownership Project (ESOP) Scheme because there is no way that in 2016 or whenever the rest of the shareholders, including SABMiller’s CEO Alan Clark, will be allowed to smile all the way to the bank, as they cash on the transaction, and the Zenzele unit-holders (SABMiller shareholders) are not doing likewise.
If the acceleration clause, which invokes a closer expiry date than a locked-in period to 2020, will be insisted upon as a remedy or condition to the approval of this transaction as part of treating these shareholders (unit-holders of Zenzele) the same as the other shareholders.
4. Micro-Brewers and Craft Beer-Makers
The plight of Microbreweries and the Craft Beer-Makers and their coexistence with ABInbev as they did with SABMiller remains critical to FAWU and will implore the authorities to take these into account.
There are jobs located in those small-scale outfits and therefore, as FAWU, we will not allow the transaction to be approved without such strong conditions on this area.
On issues of heritage, close to patented status and intellectual property, we think our government should have taken even a more robust policy position and public posture, similarly to the Rooibos issue even if issues are dissimilar or far from being the same, such that we do not allow iconic brands and other considerations of heritage and history are not simply lost in “transactions”.
As a result of the above, we will continue with our submission and participation before the competition authorities and insist on strong conditions placed on/attached to the possible approval of the transaction based on strong public interest concerns given little, yet obtaining, competition concerns.
Therefore, we are concerned of the jobs in the value-chain beyond the merged entity and will wish that the Competition Commission should take those into account as they take lessening of competition as a consideration.
Meanwhile, as we did over three occasions in the last five months, we will engage directors of ABInbev and SABMiller in few days’ time from today and entrench our statutory right to intervene/participate at the Competition Tribunal, and if need be beyond to the level of the Competition Appeal Court.
Statement issued by Katishi Masemola, FAWU General Secretary, 15 April 2016
