Amidst huge controversy around Walmart’s entry into Africa, it was yesterday announced that Oceanfresh, a South African seafood company, has secured a deal to supply hake fillets to the US-based retailer.
On 31 May, Walmart’s acquisition of a 51% stake in South African retailer Massmart was approved by the country’s Competition Tribunal. Outside of South Africa, Massmart also has a presence in a number of other African countries.
The deal, however, came under threat last week when the South African government lodged an application seeking a review for the approval of the merger. The Departments of Agriculture, Forestry and Fisheries; Economic Development; and Trade and Industry said in a joint statement that there were “serious flaws on the provision of relevant information and documents by the merger parties”.
There is a concern that Walmart, which is known to import products cheaply from countries such as China, will damage South Africa’s manufacturing sector. “Even a 1% increase in imports could result in thousands of manufacturing jobs being lost in South Africa. Given the size, global reach and international experiences of Walmart, there is good reason for the state to have such concerns,” said the government’s statement.
South Africa’s largest trade union COSATU is also opposing the takeover, saying it is not in the best interests of the country. “Given Walmart’s size and notorious business practices around the world, the Tribunal should have weighed the supposed value of Walmart’s investment in South Africa against its foreseeable adverse impact on jobs and conditions, in both the retail sector and in manufacturing and other sectors that feed into the supply chain to Massmart such as agriculture, agro-processing, chemicals, clothing and textiles,” commented COSATU spokesperson, Patrick Craven.
According to a company statement, Oceanfresh’s products will not be sold in Africa, but only in 500 Walmart stores in the US.
“Oceanfresh is among the first South African companies to supply seafood to Walmart’s US operations. As a result of this new partnership with Walmart, Oceanfresh has expanded its production capabilities in South Africa and this contract will stimulate over one hundred new direct jobs and hundreds of new indirect jobs to meet the new Walmart orders,” said the company.
The fillets come from wild caught white hake that is fished in the deep, cold, waters in the Benguela current off the coast of Southern Africa. Hake is a new line for Walmart.
Oceanfresh is UK-based African investment company Lonrho’s seafood division.