The Congress of South African Trade Unions (COSATU) is horrified that 30 years into democracy, South African-bred retailer, Dis-Chem Pharmacies, has not made any strides towards meaningful transformation.

The retail group was questioned about the snail pace of its transformation at its annual general meeting (AGM) this week with shareholders wanting to know why the company did not have a single black person in top management, and only 14.2% in senior management.

This is not the first time Dis-Chem has found itself in the crosshairs due to lack of transformation. Two years ago, the company’s founder and then CEO, Ivan Saltzman, caused a furore when he sent out an internal memo to staff calling for a moratorium on hiring white people. The memo was later withdrawn with the company saying it regretted the phrasing but fully intended to better its transformation targets.

It turns out the pharmaceutical retailer was just paying lip service and had no genuine intention to transform. The 2024 Commission for Employment Equity report confirmed that South African companies were mostly led by Whites making up 62.1% of all top management positions. African people, on the other hand, represent only 17.2% of top management even though they account for 80.7% of the economically active population. Indians represent 11.6% of top management positions, while Coloureds account for 6.1%.  

It is clear Dis-Chem is among the culprits responsible for the dismal pace of transformation in corporate South Africa. The group started as a single store in Mondeor, south of Johannesburg in 1978. Nearly half a century later, the neighbourhood around the store has completely transformed but the business hasn’t followed suit even though both the Employment Equity Act and the Broad-Based Black Economic Empowerment (B-BBEE) Act were introduced while it was in operation. 

Dis-Chem’s B-BBEE certificate, proudly displayed on its website, reflects that it is a Level 6 contributor that meets only one out of the five minimum requirements set for the various elements. The minimum requirement for ownership is 25% but Dis-Chem scores a paltry 18.25%; for management control the pharmaceutical group scored a shameful 6.89% as opposed to the 19% minimum requirement; the company also failed on the skills development front delivering a lowly 15.26% compared to the 20% set minimum; enterprise and supplier development was a disappointing 27.9% in contrast to the 42% minimum expected. The only minimum requirement Dis-Chem managed to reach was the 5% for socio-economic development.

This is a shameful performance by any standard, let alone a listed company that raked in retail revenue of R31.7bn for the year ended 29 February 2024, up 9.7% year on year. Born during the dark days of apartheid, Dis-Chem appears to be stuck in a time warp.

A quick glance at its retail outlets reveals that the company’s customer facing staff is majority Black, but this is not enough. Dis-Chem must make meaningful strides towards transformation and begin to reflect the demographics of the market from which it earns its profits if it is to be sustainable.

It is critical that shareholders exercise their moral and legal duties to hold management accountable for their obligations under the Employment Equity Act to set and meet the diversity targets. The Department of Employment and Labour too must not be found wanting or asleep.

Issued by COSATU  

Zanele Sabela (COSATU National Spokesperson)

Cell: 079 287 5788

Email: zanele@cosatu.org.za