The South African government is reportedly calling for Wal-Mart Stores to improve the supplier development fund the company said it would set up after securing approval to buy 51% of local retailer Massmart.
The calls are part of a review of the country’s Competition Tribunal’s conditional approval of the deal.
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South Africa’s Minister of Economic Development, the Minister of Trade and Industry and the Minister of Agriculture, Forestry and Fisheries filed a petition with the tribunal on 21 July seeking a review of the decision.
In the petition, the departments claimed that the tribunal erred in failing to order the merging parties to give the other parties involved in the decision all of the information they sought. The departments also claim the tribunal precluded parties that opposed the merger from “fully and properly ventilating their concerns and their submbissions”.
The three government bodies are calling for the ZAR100m (US$14.9m) development fund, which was created to support local suppliers, to be increased to ZAR500m, according to reports local news website Independent Online.
According to the reports, in the last day of hearings, the team representing the three ministers suggested the ZAR500m figure, in response to Wal-Mart’s offer of ZAR100m over three years.
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By GlobalData“We believe the conditions should be tougher given the tremendous concerns that are created by this merger,” an unnamed source told Independent Online.
The source added that a ZAR500m fund was what the three departments were hoping to achieve by taking the decision to a review. They stressed that the government was not trying to block the merger, Independent Online reported.
