WalMart merger to set precedent in SA law

Judge Dennis Davis, who dismissed WalMart's request that the case be dismissed, ruled that it must be heard, saying that the merger would set a precedent in SA's competition and commercial law. Davis added that the drafters of the Competition Act probably did not envisage a situation where public interest, that of the benefit to consumers by such a larger merger, versus that of jobs lost, would ever arise.

Minister of Economic Development Ebrahim Patel along with Trade & Industry Minister Rob Davies and Agriculture, Forestry and Fisheries Minister Tina Joemat-Petterson want the Competition Tribunal decision reviewed, while trade union the SA Commercial Catering and Allied Workers Union (Saccawu) are also applying to the court, requesting to have the merger approval dismissed altogether. State Council Wim Trengove, on behalf of the three ministers, argued that WalMart/Massmart did not supply information needed to determine the long-term effect of the merger. This information, in particular, related to what price WalMart could get certain products at overseas compared to sourcing them from local suppliers, Trengove said.

Countering those arguments, James Gauntlett, the state council, on behalf of WalMart/Massmart, said that the issue of import substitution was explored during the Competition Tribunal's hearings and that Massmart CEO Craig Patterson had testified that the companies did not keep or have that kind of information. The Competition Commission approved the merger, Gauntlett said, because it could not make a finding on unsubstantiated factors, but only on the short-term merits of the case.

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