Monday, June 06, 2011

Walmart arrives

The South African government approved Wal-Mart's $2.4 billion deal to buy local chain Massmart, opening the door to expansion throughout the continent. Wal-Mart itself plans to expand deeper into the 53 other countries of the African continent. Critics say the move will cost thousands of jobs. South African unions announced plans to strike at Massmart stores. According to a government witness at the Com­petition Tribunal, shifting just 1 percent of Massmart's product line from local goods to imported goods would cost South Africa 4,000 jobs

The country’s largest union group, the Congress of South African Trade Unions (COSATU) said “Wal-Mart is more likely to destroy jobs by using its competitive advantage to force its competitors out of business” by selling goods made in “sweatshops by nonunion workers.”

"We've looked at Wal-Mart's record, we know their story in the US, and we know what impact they have on the employment, and on the market," says Christy Hoffman of UNI Global Union, the worldwide union federation representing 20 million workers, in an interview. "A lot of the evidence we submitted to the Competition [Tribunal] shows what is the impact of Wal-Mart in the communities where they operate, and overall there is a decline in wages, there is a slight decline in employment, and the supply chains are put under substantial pressure. Small and medium-sized businesses cannot compete with Wal-Mart." According to Ms. Hoffman, Wal-Mart essentially pulled out of the German markets because German authorities discovered that Wal-Mart was selling milk at below cost, and this was affecting other businesses. "They were told by the German authorities they couldn't operate this way in Germany, using their business model, so they left."

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