Eight thousand black workers at Coca-Cola Beverages South Africa (CCBSA) are set to own 20% of the beverage company in a new black economic empowerment (BEE) share scheme. Workers currently hold about 5% of Coca-Cola equity.
The deal is part of the conditions of Coca-Cola’s 2016 merger with former partner SABMiller, now part of brewer Anheuser-Busch InBev. The Competition Tribunal on Thursday said the deal can go ahead subject to several conditions, including increased worker ownership in the beverage company as well as obligations relating to localisation and procurement.
Workers who participate in the scheme will also be able to nominate two non-executive directors to the board of Coca-Cola Fortune (CCF), the sole shareholder of CCBSA.
At a media briefing on Friday, CCBSA MD Velaphi Ratshefola declined to reveal the value of the scheme “because CCBSA is not listed”.
He did however say that the transaction, which is expected to come into effect in May, will be fully vendor-funded, meaning that workers will not be required to make any payments to purchase equity.
“From day one when we make profits on [a] quarterly basis, as dividends get declared, they [workers] will [get paid],” Ratshefola said.
CCBSA has also struck a deal with the Department of Trade, Industry and Competition (dtic) that includes an R80 million investment over three years towards towards localisation initiatives. CCBSA will also collaborate with its sugar suppliers in South Africa to increase the volume of sugar procured by CCBSA from black sugarcane farmers.
The move to increase procurement from black sugarcane farmers will see CCBSA and other industrial retailers and users of sugar procure at least 80% of their sugar needs from local sugar millers in 2021. This amount is expected to increase to 95% by 2023, according to Minister of Trade, Industry and Competition Ebrahim Patel.
The targets are in line with the Sugar Master Plan signed in November last year by farmers, retailers, workers and government, Patel said.
“The commitment from CCBSA to increase the level of worker ownership in the company, deepen the level of transformation in the sugar value chain and support the broader localisation drive in the economy, are important steps in our efforts to create a more inclusive economy in South Africa,” said Patel.