“WalMart does not take ownership of the goods until a product is sold.”-Sofia Scasserra, FAECYS

At a labor conference in South Africa, the Argentine Federation of Commerce and Service Workers ( FAECYS ) warned of allowing WalMart to set up shop.  The warning wasn’t about labor issues, but supply issues.  They claim that since WalMart was allowed to operate in Argentina, the affects on business supply has almost destroyed the business middle class.

In Argentina WalMart operates a “spot sale” deal with its suppliers.  Basically WalMart doesn’t pay anything for the products it stocks, until they sell.  On top of that, WalMart takes three months to pay suppliers.

Another trick WalMart plays; it ships its own products in from China.  First the the products go to Brazil, then Argentina, thus avoiding tariffs.

In the case of home appliances is was discovered that WalMart forced suppliers to sell below their cost, and even give them to WalMart for free.

The result is that Argentine suppliers are going out of business.  And the result of that, is that small manufacturers in Argentina are going out of business as well.