School of Retail
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THIS ISSUE: 06 May - 12 May
Checkers is required to present all of its advertising for the next three months to the Advertising Standards Authority (ASA). In January this year, you will remember, Shoprite was reprimanded, at the insistence of Pick n Pay of the lower fourth, for claiming that its annual Heydays promotion offered unbeatable prices to the discerning punter. Pick n Pay felt that the claim was unsubstantiated when it came to individual products, the Authority agreed and placed Shoprite on probation for six months, during which it would not be required to pre-clear its ads should no new complaint arise. In April, Pick n Pay once again lodged a complaint against Checkers’ unsubstantiated comparative pricing claims, and Bob’s your uncle.
Comment: Oh, for goodness sake. Whichever way you look at it.
Business Day 09/05/11
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Nervous days for the Men in Black, with Cosatu threatening, as it will, that even if the stern patricians of the Competition Tribunal rule in favour of the Wakro deal, they will still oppose it in court, and failing that, we presume, on the streets. Under consideration, just to remind ourselves, are four main issues: the anti-competitive effects of the merger, with the possible removal of “effective retail competitors” (several of whom have expressed support for the deal), the issue of imports vs domestic products (has anyone looked on the shelves at Pick n Pay and Shoprite lately?), the unfair trade conditions imposed on domestic suppliers (it’s called “buying”, darlings. If you can’t stand the heat…) and job losses (all existing contracts will be honoured, and employment growth, rather than the reverse, is expected). Comment: Just get it done already. Failure to sign would have actual, real consequences, not the hypothetical garbage being showboated around by the unions and their friends in government.
Lonhro Plc’s seafood division, Oceanfresh, has been chosen by Makro to provide 16 product lines under its private label “M Brand” brand … brand, and by Pick n Pay to provide 16 items under its “Finest range” brand. Oceanfresh has been supplying to Makro for three years now, and this, they say, is a ringing endorsement for both the quality of their branded products and the sustainability of their fisheries, sustainability being a big ticket over at Massmart. The wholesale side of the business – 75% of total food sales – is also a big drawcard for the manufacturer. Oceanfresh has also just listed at Masscash banner Shield. Comment: Getting in at Massmart is no small matter these days – food retail is growing all over the business, from hybrids like Cambridge to the new Game Foodco project, which certain experts have tipped as a standalone in the next couple years. There’s also, we hear, the possibility of a push into Africa with Walmart.
Tatler Reporter 10/05/11
The Big Feller is fighting allegations of tax avoidance in five African countries, including the Beloved one, brought against it by anti-poverty NGO ActionAid International. At issue are SABMiller’s transfer pricing strategies, by which valuable trademarks for African beers are held in Europe rather than in their country of origin, eating into the profits of the African subsidiaries and ensuring that less tax is paid over here, to the tune, ActionAid says, of around $31million dollars. For its part, SABMiller denies the allegations, pointing to the $1billion it contributes in taxation to the South African economy alone every year. It also says that it doesn’t engage in aggressive tax planning in any part of its operations.
Comment: Setting it apart, somewhat, from other major corporations in this regard.
Business Report 06/05/11
wallwho12 May 2011 (04:43:31 PM)I notice with glee that Walmart is paying your rent.
By 2030, there will be a 17% deficit gap between the supply and demand of water in South Africa – a gap caused not by thirsty schoolboys and enthusiastic rose growers, but substantially by large manufacturers and industrial agriculture. Enter Nestlé, the world’s biggest food business, and the World Economic Forum’s Water Resources Group, chaired by Nestlé chair Peter Brabeck-Letmathe. Together with the SA government, the parties will be looking at water conservation, demand management and developing more sustainable management of groundwater resources in order to identify how South Africa's plans for growth can be met with the water it has safely available.
Comment: Good corporate citizenship, that big chap, and a smart move to get involved in the management of a resource the business itself will presumably still need after 2030.
Mozambique and Namibia offer more efficient, low cost alternatives than South Africa when it comes to logistics, according to the Imperial Logistics 7th Annual State of Logistics study. While the cost of getting goods to market decreased by 1.2% between 2008 and 2009, down to 13.5% of GDP, this latter number should have been closer to 12.5%, given factors such as a decline in the price of diesel and a lower interest rate over the period. Imperial’s Abrie de Swardt points out that new transport corridors are opening up all over the show – between Asia and Africa, and Asia and South America for example, and that South Africa risks losing volumes from customers – like Zambia – to the north. Comment: Poor logistics infrastructure, inefficiencies and high costs seriously undermine South Africa’s position – which can no longer be taken for granted – as the gateway to Africa, still a significant competitive advantage.
In the wake of the less than rosy results Pick n Pay posted a couple weeks back, some investors are taking advantage of the share’s weakness to cement their position in the Pikwik holding company – notably, one Mr R. Ackerman, who recently took a punt to the tune of R4.2millions, his wife Wendy, in for a bar and some change and their two lovely children, Gareth and Suzanne.
Emphatic non-Englishman James Wellwood Basson is once again South Africa’s most handsomely remunerated man. While Shoprite ranks only 15th by market capitalisation on the Johannesburg Securities Exchange (JSE), Sir James took home R627.6million in salary (R32.1million) and share options (the rest) last year. According to Chairman of the board Christo Wiese, he is worth every farthing of it.
The Medicines Control Council (MCC) has indicated that it is unlikely to reverse its 3-month deadline for pharmaceutical businesses to stop supplying products containing the painkiller dextropropoxyphene, a ban which Adcock Ingram has appealed. Adcock plan to embark on a series of clinical trials on products containing the catchily-named compound.
Business Report 05/05/11
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