Choppies’ arrogance in Botswana

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  • The average Choppies employee in South Africa earns P2500 and over P3000 in Kenya
  • Choppies opens 85th store in SA
  • SA stores made a paltry P3 million in profit
  • Profitable Botswana subsidizes region

GAZETTE REPORTER

Across the border in South Africa, the lowest paid Choppies employee earns R3200 (about P2500) while in Botswana, an average employee of the retail giant is paid as low as P600.
Interestingly, Choppies operates in 8 Sub Saharan African countries and Botswana alone contributes 40 percent to Choppies’ total group revenue. Batswana make a lot money for Choppies, yet the company misemploys its money-makers only to pay employees in loss making foreign countries.
This publication spoke to Katishi Masemola, the General Secretary of the Food and Allied Workers Union in South Africa, who said the union demands R4000 monthly as minimum wage/ an increase of 10 percent.
It  is not only South Africa. Employees of Choppies who bought out majority of Ukwala outlets in Kenya, got a six percent salary increase following the signing of a new wage agreement that had been backdated to September 2017. The salary increase was effective 1st September 2017 and will stay in force for a year, following which employees can expect a further eight percent boost to their salaries again this year. The agreement signed between Choppies and the Kenya Union of Commercial, Food and Allied Workers (KUCFAW) will also see new employees earn a minimum Shl8 943.98 and a maximum Sh30 919.14, exclusive of housing allowances. The pay is an equivalence US$300, which is more than P3000.
New benefits, such as a commuter allowance of Sh2,000 have been introduced. Pre­existing benefits such as housing allowance and overtime pay have been increased and regularized in the agreement.
The Food and Allied Workers Union strike in South Africa branched off into a new twist. Choppies Enterprises unionized members were forced to retreat, after the employer resisted to go to the tables with union leaders unless they returned to work. Ramachandran Ottapathu, the Chief Executive Officer of the group informed this publication that “their demands would not be met” and Choppies “would not negotiate”. “If I negotiate the strike would have to be called off,” he said. The strike was lodged this past Tuesday in pursuit of four demands. Speaking to The Botswana Gazette this past week, Katishi Masemola, the General Secretary said the union demanded R4000 monthly as minimum wage/ an increase of 10 percent, guarantee of the 13th cheque/annual bonus, 40 hours working week and the setting of national bargaining forum. At least 2000 members joined the strike in South Africa from “traditional” Choppies stores, according to Masemola.
On Thursday, union leaders were busy consulting workers to see if they have the appetite to suspend the strike until the outcome of the talks. “If the outcome is positive they continue working and if negative they’ll return to strike,” Masemola.
The halt of the strike is strategic, it is meant to get Choppies CEO to negotiate with the unions, and chances are the union could just score a salary increase for its members.
This publication understands that members of the union resumed work on Friday 27th April and worked on Saturday and Sunday. The meeting was scheduled for Friday but was postponed to Monday where union leaders and the employer were locked behind closed doors somewhere in the affluent suburbs of Sandton, Johannesburg Municipality. Although the strike was suspended, Ottapathu explicitly threatened to “dismiss” employees involved in the strike though he wouldn’t confirm the number from the top of his head.
Here in Botswana 18 Choppies employees who were involved in a similar strike over salaries were fired by the CEO after a disciplinary hearing. Linda Manguba, the Human Resource head wrote “following the disciplinary hearing held on the 25th April 2018 at the Human Resource Office, wherein you were charged with participating in an illegal/unlawful strike and break of contract/neglect/carelessness of duties, we regret to inform you that the overwhelming evidence against you and the nature of the aforementioned charge, you have been found guilty. In light of the above and by this letter hereof, the company has decided to summarily terminate your contract of employment. You however reserve the right to register your appeal, if any with the Chief Operating Officer of the company within the next 14 days from the date herein stated and failing which such right shall be forfeited. Employees argued that they were only given two days to prepare for the hearing and this amounted to an unfair process that yielded unfair results. Ten more appeared before a disciplinary committee this Monday. It is yet to be confirmed if they were dismissed. The strike caught the attention Botswana Federation of Public Employees Union (BOFEPUSU). The union has called on labour minister, Tshenolo Mabeo to intervene and investigate through Labour Inspectorate Department the gross abuse of workers and violation of the labor laws by all business companies in Botswana specifically the chain retail stores. “The actions border around noncompliance by Choppies Management to country’s labor laws and to international standards.” Tobokani Rari, the General Secretary wrote to the minister.
Ottapathu when responding to a media question from this publication maintained that they were not protected by law. “You have all the right to strike. If you have a problem launch with the commission of labor.” Employees who embarked on strike at Westgate demanded salary increment and better working hours. While Ottapathu was willing to negotiate in SA, demands in Botswana are nowhere near being met. Botswana is the spine of profitability for the group, amassing about 40 percent of total revenue while SA collects about 36 percent.
In South Africa Choppies pays an average R3 200, according to Masemola, although he says minimum wage is proposed at R3500. In pula terms, it suggests that Choppies pays its employees just over P2500. In its own defense, Choppies has cited Botswana’s minimum wage as the basis of the pay disparity and does not consider the high revenue it rakes in the country.
Headed by the shrewd businessman Ramachandran Ottapathu, Choppies is no doubt a gigantic venture. Its true size is however reflected only in Botswana, despite years of operation in foreign markets, where the expectation was that more profits would flow. It appears the company makes more money in Botswana and fund expansions across the borders, only for those expansions to make losses or little profit.
This week, the wealthy Chief Executive Officer (CEO) of Choppies, who earns a monthly salary of close to P1million monthly called journalists to a briefing to announce financial results for the six months ending 31st December 2017.  The company made a whopping P5.7 billion in total revenue from 8 countries in which it operates.
The interesting part however is that half of that money was made here in Botswana, in a country where employees earn a paltry P600. Choppies has 11 stores and 2 distribution centers in Kenya. It has 2 stores in Tanzania, 1 in Mozambique and Namibia. It further has 15 stores and 1 distribution center in Zambia, 32 stores and 2 distribution centers in Zimbabwe. Botswana and South Africa have the largest footprint. In fact, Botswana used to have the largest footprint but of late, South Africa, the regional superpower, has more stores than Botswana. South Africa has 88 Choppies stores, 3 distribution centers and 1 production plant. Botswana has 85 stores and 3 distribution centers.  While South Africa has the largest number of stores, Choppies rakes more cash in Botswana. For the period under review, Choppies made a consolidated P67 million as profit after tax from all its operations.  The money was way lower than profits made from Botswana operations. In fact, Botswana alone made P87 million as profit after tax. Zimbabwe operations made P12 million, while South Africa, the host of Choppies’ largest operations made a paltry P3 million in profit. Other countries made a collective loss of P35 million.
During the period under review, Choppies spent over P1 billion in operational expenses, most of which were geared towards expansion especially in South Africa and other countries. Between December 2016 and December 2017, a total of 20 stores were opened in South Africa, while in Botswana only 2 were opened. In its other markets, 5 stores were opened in Zambia, 2 in Kenya and the rest a store each was opened.

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