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Zim suppliers go into hiding
10/07/2007 09:58 - (SA)
Johannesburg - Edgars in Zimbabwe, of which Edcon is a shareholder, suffered the strong arm of the Zimbabwean security forces as several of its staff were arrested for cutting prices by 25% and not the enforced 50%, Moneyweb reported on its website on Tuesday.
A senior staff member at director level was subsequently arrested when he arrived to bail out the staff members. All were released over the weekend.
Head of investor relations at Edcon, Tessa Christelis, told Moneyweb that it was mayhem in the stores and that there was not much stock left.
"Customers have been restricted to one item per person and doors
will soon have to be closed." She said new stock would be a lot more expensive.
While things were very difficult at the moment, Edgars in Zimbabwe was planning to continue as a going concern. She said staff were terrified.
Christelis said the Zimbabwean government intended to adopt price controls of cost plus 25% across the board.
"We lost control over the Zimbabwe business years ago and although we provide support, it's a passive business on our accounts and we have no involvement in the day-to-day running of the operation."
Spar chief executive Wayne Hook said the same of the relationship with its Zimbabwean interests.
"First up we have a small interest in the business so we don't
manage it. They are struggling, they have had retailers arrested and it is a dreadful situation, so that is a major problem," he told the website.
Hook said Spar stores were adhering to the latest requirements and the pricing that Spar adopted was as stipulated on June 18.
He said they were trying to trade but it was very difficult as some of the major suppliers were in hiding.
"It is not a satisfactory situation and stocks are running low,"
Hook added.
He said they were not 100% up to date on what's happening on
the ground and that the situation was getting worse by the day, with people running into the stores and taking what they could.
"It is only a matter of time, they can't pay for the stock and the retailers are putting pressure on suppliers to lower their prices."
Meanwhile, Old Mutual, whose listed price had recently been used as a proxy for the real exchange rate in Zimbabwe, and had about 1,5 million policy holders in the country, is watching the situation
extremely closely.
A spokesperson for the group told Moneyweb on Monday night: "We have been in Zimbabwe since the late 19th century and we take our responsibility extremely seriously. In respect of that, we will continue to invest in the Zimbabwean economy on an assessed basis."
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