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Reports from the Field
Introduction
In 2011 Walmart's bid to buy a controlling stake in South Africa's Massmart Holdings, Inc. went before the country's Competition Commission and Competition Tribunal, both of which would determine whether to grant the merger outright or to place conditions on it. Massmart Holdings comprises a number of branded subsidiaries in the South African market, including Walmart-style general merchandise dealers, electronics retailers, do-it-yourself building suppliers, and food wholesalers--Game, Dion, Builder's Warehouse, and Makro, respectively--as well as the more recently acquired food retailer, Cambridge Food. South African unions, most prominently the South African Commercial, Catering and Allied Workers Union (Saccawu), with support from the Global Union Federation UNI Global and, in the United States, the United Food and Commercial Workers, fought the merger.
Because of a public interest clause in South African competition law, representatives of the state also intervened, led by the Minister of Economic Development, raising concerns over the potential impact of Walmart's global supply chain on South African manufacturing and agricultural jobs. The departments of Economic Development; Trade and Industry; and Agriculture, Forestries and Fisheries sought to have stricter conditions imposed on the merger, primarily through expanded commitments to sourcing locally and to providing local companies with access to Walmart's global networks. The approval process became protracted, reaching the Appeal Court in 2012. Ultimately the court's judgment bound the merging parties to several conditions, chiefly the establishment of a fund of R200 million (approximately $20 million) to develop and provide training for small- and medium-sized businesses, primarily agricultural producers, to enter the retailer's supply chain.
I examine the early impact of the supplier fund and the argument that retailers can serve a developmental role in emerging economies through supply chain programs in more detail elsewhere.1Here, I focus on reporting the results of a survey of basic labor conditions in six branches of Cambridge Food in Gauteng (the province that includes Johannesburg and Pretoria). Cambridge is the primary food retail subsidiary through which Massmart has planned to expand its share of the food market in South Africa and, eventually, throughout the continent.2A team and I conducted the survey in 2013 as a baseline study to support continued research on working...