The Walmart/Massmart wrangle playing itself out at the Competitions Commission has all the signs of legal compliancy, but little pragmatism.
Someone should tell the Department of Trade and Industry (dti) to make an appointment with Walmart to find out what Walmart’s purchasing needs are. Tell them that we need their international marketing expertise to sell our merchandise into their worldwide operations. After all, if local subsidiaries work with their international head offices and there is the will to make it work then anything is possible.
Just ask Mercedez Benz South Africa and Volkswagen South Africa about their export successes to the global car markets.
We need to think of Walmart as a country and not a company. Gosh, its sales exceed $400 billion (R2.7 trillion) annually.
Sadly, there is little news of any proactiveness from the department.
The dti’s mindset is all cock-eyed. If your mission is to save jobs, success will be measured by how many jobs will have been saved. How about using the same energy to maximise job creation by “encouraging” Walmart to buy from South African companies for their operations worldwide? The time for getting our “prenuptial” agreement sorted out with Walmart is running out fast. If that happens then it will be business the Walmart way – and South Africa would have missed out establishing a “new way” of doing business between multinationals and local businesses which the world could have learned from.
Walmart’s sales a day exceed $1bn and, as they say, in the first five minutes of any sales course “just ask for the order”.
I would be surprised if Walmart would say no to a worldwide procurement programme for South African industry. We have to be bolder.
Fighting Walmart’s takeover on the grounds of accelerated Chinese imports that will supposedly flood the newly branded Massmart stores ignores the reality of what is happening under our noses. Chinatown malls and independent Chinese retailers are being established throughout South Africa. Often flouting town planning regulations, manipulating import tariffs, ignoring labour regulations, employing their own nationals ahead of South Africans, almost zero local purchases, paying minimal taxes of any sort and offering an array of merchandise that would hardly pass an SA Bureau of Standards test and you have the Chinese way of doing retail business.
As for good corporate governance – what’s that! Staff training schemes – not likely and they employ their own nationals largely. In these malls the Consumer Protection Act (CPA) will be largely toothless.
My assessment of the “Chinese malls” in South Africa may sound harsh, but if we are worried about labour losses as a result of Walmart’s Chinese import substitution then it is already happening. Walmart on the other hand will abide by our nation’s laws and regulations and make sure that its corporate governance is top notch. More importantly, it will have corporate social investment programmes, staff training schemes and pay vast amounts of import duties, company tax, unemployment insurance funds, income tax, VAT, skills levies and so on regularly.
And the CPA will mean something. In fact, its staff training is bound to be world-class. Finally, the dti will have access to the group’s importation records, which will show where the possibilities for import substitution lie.
Walmart may not be perfect, but as Lyndon Johnson, that venerable US president, once said: “I would rather have them in my tent peeing out and not standing out and peeing in.”