Government asks H&M to consider buying from local suppliers

Thursday, May 10, 2018

Economic Development Minister Ebrahim Patel says the department has made a proposal to global clothing retailer H&M to consider buying goods from local suppliers. 

The Minister said this in a media briefing ahead of tabling the department’s budget vote speech in the National Assembly on Thursday. 

“Last year, H&M, the world’s second largest clothing retailer, marketed a sweatshirt with offensive language. 

“When we engaged H&M in the weeks that followed, we noted that they imported everything in store. 

“Following their apology and as part of reorienting the H&M worldview of Africa, we have proposed that they atone very practically by sourcing goods from South Africa.” 

The Minister said the global clothing retailer has agreed to send a procurement team to South Africa “within the next few weeks” to visit potential local suppliers. 

Old Mutual’s homecoming to result in R500 million fund for SMEs 

Minister Patel said, meanwhile, that the homecoming of Old Mutual will result in a relocation of the global headquarters for Old Mutual’s Emerging Markets business to Johannesburg through an agreement with government, which includes the establishment of a R500 million fund for developing small business, a commitment to no job losses as a result of the merger, and a further commitment to increase BEE shareholding to “best in class”.

“The effort of these companies to increase local procurement and invest in South African entrants to their supply chain has resulted in new jobs and an opportunity for young, small, local businesses to grow. 

“Furthermore, what these transactions all show is the transformative power we are bringing into the economy through the operation of the Competition Act,” he said. 

Minister announces major projects for the year ahead 

The Minister said, meanwhile, that the department aims to deepen economic inclusion through the Competition Act, measures targeted at youth, social partner agreements and worker employment advocacy. 

He said the Competition Amendment Bill, published in December 2017, will be finalised through Cabinet and submitted to Parliament for consideration. 

“The Bill provides clear and practical mechanisms to address high levels of economic concentration that excludes small business and black South Africans from the mainstream economy.

“[The Bill also] gives the Competition Authorities powers to impose remedies to address problems in the structure of the economy and to promote economic inclusion,” he said. 

The Minister said the Bill also deals with practices by dominant firms that lead to excessive prices, price discrimination against smaller players and other abusive and anti-competitive practices. 

“This is a major reform for our almost 20-year-old Competition Act,” he said. 

Minister Patel said competition authorities will target 100 cases of cartel conduct, consider 400 mergers and take on an additional two abuse of dominance cases. 

The Minister will table the results of the market inquiries into private healthcare, grocery retail and data services in Parliament this year. 

His department will also continue to monitor progress and implementation commitments on the Youth Employment Accord and also open discussions with business and labour on measures to promote greater worker ownership of companies and an inclusion of workers on the boards of companies. 

Minister Patel said other areas of focus for the year ahead will be to boost investment in infrastructure; support South African jobs by increasing localisation; and prepare the economy for the new technology wave that is called the fourth industrial revolution. –