Spar is joining Pick n Pay in objecting to proposed merger of Shoprite and Massmart
SPAR yesterday reiterated PicknPay’s objections to the proposed merger of Shoprite and Massmart, citing negative consequences for competition, and said there would be employment losses if the merger was approved.
The Competition Tribunal heard yesterday, on the second day of the hearing, submissions from Spar and the South African Commercial Catering and Allied Workers’ Union (Saccawu), among others, relating to the proposed merger of Shoprite Supermarkets acquiring certain stores from Massmart Holdings.
Shoprite plans to acquire 56 retail supermarket stores and 43 retail liquor stores operated under the brand names Rhino Cash & Carry, Rhino Liquors, Cambridge Food, and Cambridge Food Liquor, 10 wholesale (Cash & Carry) stores, two wholesale liquor stores; and Massfresh, with two entities – a meat-processing plant facility and Fruitspot, comprising three processing facilities in Cape Town, Durban and Johannesburg.
The target businesses are active in the retail and wholesale trade of grocery, liquor and associated items and are wholly owned and controlled by Massmart. Massmart, in turn, is controlled by Walmart.
In its submission, Spar said: “The independent Spar retailers who will be most affected by Shoprite acquisition of the targeted stores have explained that if the merger is approved, they will likely suffer an impact on the turnover, have to retrain staff to cut costs and that they will face a real threat to the significant personal investments that they've made in those stores.“
The retailer said the merger would produce serious negative consequences for competition and there would also be employment losses if the merger was approved.
“Despite this realisation, and despite the commission indicating in its own report that it recognised the need to address the competition with appropriate remedies, we learned from it yesterday that it has not managed to do so,” it said.
Meanwhile, Saccawu said there was a potential for job losses.
“On the basis that the merger is approved, within a few months an employer can then issue Section 189 notices for retrenchment. We are saying the wording should be that there that there shouldn’t be retrenchment for at least a period of three years,” the union said.
Saccawu said it did not understand why, when the targeted stores had been merged, Spar and PicknPay would be affected negatively.