African Unions to Team up Against Wal-Mart

A global labour federation plans to bring African unions together to battle the expansion of U.S. retailer Wal-Mart on the continent, a senior group member said on Wednesday.

Wal-Mart paid $2.4 billion for 51 percent of South African discount retailer Massmart in a deal that was finalized last month but is being appealed by South Africa's government and some unions.

The deal gives Wal-Mart a substantial presence in Africa's top economy and exposure to at least a dozen other countries. South Africa's unions and three government departments have opposed the acquisition, saying it will squeeze local manufacturers and spark job cuts.

"Wal-Mart is now going into 14 African markets. We have an anti-Wal-Mart alliance of unions globally, now we will have an African branch for this alliance," Phillip Jennings, general secretary of UNI Global Union said.

Jennings also said UNI Global was backing South Africa's service workers union and the government departments who are currently appealing the decision by anti-trust regulators to let the deal go through.

South Africa's competition regulator imposed minimal conditions on the transaction, such as requiring Wal-Mart to set up a 100 million rand fund to support local suppliers.

"It was much too premature for Wal-Mart and Massmart to start dancing in the streets and organizing victory parades because the legal process in this country is not complete," Jennings said.

The government is not aiming to overturn the deal, but to impose tougher conditions and specific penalties if Wal-Mart does not stick to the conditions, a South African newspaper said this week.

However, competition law experts have said any government appeal will have little legal basis.

The government had argued the competition authorities should impose targets for using local suppliers on Wal-Mart. Without such targets, they argued, the deal could lead to lost revenue and jobs for local manufacturers.

But imposing such targets could also mean a breach of international trade rules, experts have said.