The government's interference in the Walmart merger with Massmart would jeopardise future foreign investment, the Inkatha Freedom Party said on Saturday.
Instead of encouraging investment that could lead to lower prices the government had protected existing monopolies and pandered to union fears, IFP spokesman for trade and industry Mario Oriani-Ambrosini said in a statement.
“The outcry about Walmart's acquisition is not about protecting local manufacturers but rather protecting the monopoly of local distributors and supermarkets and their profit margins,” he said.
Oriani-Ambrosini was reacting to the Competition Appeal Court ruling on Friday which allowed the United State's retailer to continue with its merger with local retailer, Massmart.
“Once in South Africa, Walmart will be in a position to identify South Africa's quality products which it could sell successfully throughout its worldwide outlets, especially in the United States,” he said.
This would enable South Africans to benefit from the US's African Growth Opportunity Act which encouraged trade between the US and Africa.
“The department of trade and industry's priority should have been to lobby for the renewal of this Act not interfere with the merger,” Oriani-Ambrosini said.
The IFP felt the judgement was not tough enough on government.
What had happened in South Africa would discourage future foreign investors who were unwilling to put themselves through “the hellish path walked by Walmart” with the possibility of an uncertain outcome.
“To reassure foreign investors, government should have stayed impartial and out of this judiciary process, and the judgment of the Competition Appeal Court should have given government this message,” he said. - Sapa