Economists recommend ZAR2 billion fund for Wal-Mart /
On 6 June 2012, government and the South African Commercial,
Catering and Allied Workers Union (SACCAWU) submitted their
economic report on the fund that is to be formed in terms of a
condition imposed by the Competition Appeal Court (CAC) in the
proposed acquisition of Massmart Limited (Massmart) by Wal-Mart
The report calls for a fund in the region of ZAR500 million to
ZAR2 billion. Professor Stiglitz was appointed by government to
prepare the report jointly with James Hodge of Genesis Analytics,
who was appointed by SACCAWU. The report calls for an increase in
the value of the fund from its originally stipulated ZAR100
million. It recommends that a larger fund would serve as an
incentive for Massmart to initiate a programme that would more
adequately empower local suppliers.
The recommendations of the Stiglitz-Hodge report differ from
those of Professor Mike Morris, from the University of Cape Town,
who was appointed by the merging parties to prepare a report.
Professor Morris suggests that a large fund would result in a
discriminatory economic burden being imposed on the merged entity.
He concludes that a large fund would be susceptible to
mismanagement and possible corruption. Professor Morris argues that
a smaller, more focussed fund would yield better results.
The experts have agreed that the outcome of the fund should be
the sustainable development of suppliers that will outlast the
The merging parties, as well as all the government and unions
who were parties in the matter, have one month to respond to the
reports before presenting their submissions to the CAC.
Webber Wentzel acted for Wal-Mart in the merger proceedings.
The Competition Commission recently found a dual distribution restraint to amount to a market allocation agreement between competitors, which is outright unlawful under the Competition Act, 89 of 1998.
Sub-Saharan Africa is primed for an era of sustainable growth. As other markets across Latin America and Asia face short-term challenges and many advanced economies decelerate, the outlook remains encouraging for sub-Saharan Africa to gather speed and create greater opportunities for its rapidly growing population.
Previous updates summarised the main provisions of the United Arab Emirates Federal Competition Law (Federal Law No. (4) of 2012) which came into force on 23 February 2013.
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