Why the EFF is wrong: Pick n Pay

Pick n Pay, one of South Africa’s largest employers, has hit back at claims made by the Economic Freedom Fighters (EFF) that the company is greedy, sitting on a large cash pile.

The EFF said last week that it is concerned by rising food price inflation that affect largely the poor majority, most of whom only survive on social grants. “There is no reasonable justification for excessive rise in food prices,” it said in a statement.

“What is apparent is that supermarket chains like Shoprite, Pick ’n Pay and others including food producers are driven by greed and profiteering motives without any social consideration to the large majority who live in poverty and struggle to afford food.”

The political party pointed to a report by Moneyweb in November 2015 indicated that 100 largest companies on the Johannesburg Stock Exchange (JSE) were sitting on a cash pile of R400 billion.

“Among the companies with large cash reserves generated from disgusting greed are supermarket chains such as Pick n Pay, Shoprite, Spar and Woolworths who are hoarding over R11 billion,” the EFF said.

Pick n Pay told BusinessTech that claims by the EFF that supermarkets are driving the increase in food prices, and that Pick n Pay is one of a number of companies “hoarding” large cash reserves, are ‘totally false’.

“Both of these claims are totally untrue.  Pick n Pay is totally committed to keeping prices as low as possible for our customers, both by ensuring that any price increases requested by suppliers are fully justified and by reducing costs in our own operations.

“As a result, the internal inflation we publish every six months have consistently been lower than the rate of food inflation reported by Stats SA,” it said.

The retailer said that far from hoarding large cash reserves, it is investing significantly in South Africa.  “We are spending R5 billion in capital over two years, in particular in opening and refurbishing stores and expanding our supply chain.”

Pick n Pay said that at a time when over half of 15-24 year-olds are unemployed, it is creating 20 new jobs per day, and is committed to creating 20,000 by 2020.

“This type of investment in the future of South Africa is exactly the vote of confidence in our country that politicians should be applauding, not distorting,” it said.

The EFF called for the South African Reserve Bank (SARB) to be nationalised after the Monetary Policy Committee took the decision to up  the repo rate by 0.25%, to 7% on Thursday, last week.

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Why the EFF is wrong: Pick n Pay