Agreement to improve quality of small business

Johannesburg – Small businesses are set to benefit from an agreement signed by Massmart and the South African Bureau of Standards (SABS) by improving the quality of their products and becoming more competitive.

According to the agreement, Massmart has agreed to SABS conducting quality audits on suppliers to Massmart as well as testing products on its shelves to ensure they meet various international standards. The South African brand has also agreed to provide training to its suppliers, especially small, medium and macro enterprises.

The agreement follows the “unintended” consequences of the Consumer Protection Act, which came into effect in April.

According to Massmart CEO, Grant Pattison, complying with the requirements of the Act had resulted in raising the costs of producers, which made it more difficult for small business to compete.

Complying with the requirements can cost anything from R35 000, and the agreement intends to reduce these costs.

SABS CEO Boni Mehlomakulu said the signing of the agreement was an important milestone, adding that SMMEs did not always meet the required standards of big companies, who were the ones who usually participated in the formulation of the standards.

Most SMMEs fell short of that standard developing process because of the high costs. The process is lengthy, taking up to three years to complete.

The memorandum will see a simpler as well as cheaper method of meeting the required standards.

“The partnership is a first for South African producers in light of its intent to promote small enterprise development, third party quality assurance and certification assisting SMMEs in meeting the requirements of the Consumer Protection Act,” she said on Tuesday.

The agreement will initially focus on audits of Massmart’s SMMEs’ supplier base that do not have a certified quality management system like the ISO 9001.

SABS Commercial Executive Sylvester Retlabala said the aim of the agreement was to make sure that the SMMEs that supply products to Massmart have quality products that can be competitive.

“It’s not a standard of low quality, it is simplification,” said Pattison, adding that it did not exclude other retailers.

The agreement covers sectors including, but not limited to, textiles, leather, building materials, chemicals, agriculture, food and health related products as well as imported goods.

Mehlomakulu said SABS was enthusiastic to get the process up and running.

At the end of May, the Competition Tribunal decided to allow US retail giant Walmart to merge with Massmart with conditions, resulting in Walmart acquiring 51% of the South African retailer.

Three government departments have opposed the merger. In filing their heads of argument last week,the Departments of Agriculture, Forestry and Fisheries; Economic Development and Trade and Industry said the merger could have a “devastating” effect on local jobs.

Labour is also against the merger, with Cosatu agreeing with government’s application that the R16.5 billion merger should be reconsidered or have stricter conditions imposed.

The trade union on Monday called for local retailers to carry a 75% quota of locally produced products.

On Monday, Massmart filed papers to the Competition Appeal Court, saying the notion that the merger would lead to job losses was a perception, while it also took note of Cosatu’s statement.

“The issues raised traverse ground that will be covered during the Competition Appeal Court hearings that are scheduled to take place on 20, 21 and 24 October,” said Massmart. – BuaNews

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