South African business tends to be embarrassed about publicly raising constitutional arguments in its defence.
You don’t hear the liquor industry, for example, relying on the freedom of speech provisions of section 16 to defend its right to advertise legal products.
But the fact is that our founding law regulates all areas of national life, from the socioeconomic rights that guarantee poor people access to basic services to dematerialised realms of high finance. And it is a pretty basic constitutional provision that all are to be treated equally before the law.
So why is the department of economic development trying to subject Massmart and its would-be-parent, Walmart, to a unique set of regulations that will apply to no other retail group — rules that represent an immense and direct interference in the business practices of an individual company?
The department wants to impose stringent local procurement quotas on the group, including locally sourcing 50% of general merchandise and 95% of food and tobacco.
It is trite economics that if these provisions were applied across the retail sector local suppliers would be less exposed to the global competition that they need to innovate, improve quality and hold down prices.
Consumers would end up carrying the costs. Of course, the department has no leverage over the other retail chains at present — they don’t have major international investors asking for regulatory approval to buy control — so it is trying to displace all the pressure on to Massmart.
Disguising the conditions as a “pledge” on which the Competition Tribunal ought to make approval conditional is no real help to the department. Massmart/Walmart would be playing retail hard ball with one arm tied behind its back, watched over by a referee wearing an eye patch.
That isn’t just unfair, it has to be illegal. South Africa has trade laws, labour laws and laws governing contracts between buyers and suppliers. If they are good enough for everyone else, then they are good enough for Walmart.
To read the first half of the editorial (“Zuma’s wrong call on Libya”) — click here.