The pharmacy group Dis-Chem has acknowledged that the controversial letter, which imposed a moratorium on the appointment and promotion of white workers, has had significant financial repercussions for the company.
DIS-CHEM ADMITTED FINANCIAL TOLL OF CONTROVERSIAL LETTER
According to a report by Maroela Media, the pharmacy group’s financial results for the first half of the 2024 financial year showed a decline in performance in the second half of the 2023 financial year (September 2022 to February 2023) due to “negative publicity” that carried over into the first quarter of the 2024 financial year.
Profit before tax in the second half of the 2023 financial year decreased by 11% to R560 million from R632 million.
Reports indicate that Dis-Chem lost hundreds of millions of rands due to the letter’s impact. Ruis Morais, the former CFO, took over from Ivan Saltzman as CEO on 1 July this year.
IT LOST HUNDREDS OF MILLIONS OF RANDS DUE TO THE LETTER’S IMPACT
Saltzman, who founded the company with his wife, Lynette, in 1978, remains an executive director on the board and an active member of the executive management team.
On 19 September last year, Saltzman sent out a letter to workers in which a moratorium was placed on the appointment and promotion of white workers.
The letter stated that the company’s transformation efforts regarding its employee profile need to be revised and that the company may be fined if it does not achieve the transformation targets.
A LETTER STATING THE COMPANY’S TRANSFORMATION EFFORTS WAS LEAKED
The contents of the letter were leaked and caused an uproar, with many outraged consumers stating they would stop supporting Dis-Chem.
Dis-Chem expressed regret for the wording and tone of an internal memorandum that was erroneously widely distributed.
The board of Dis-Chem stated in a release that the memorandum did not “reflect the values of the company”
A MORATORIUM WAS PLACED ON THE APPOINTMENT AND PROMOTION OF WHITE WORKERS
“The release did not follow our correct internal approval processes that were put in place to make sure that the relevant checks and balances were carried out.”
The pharmaceutical retailer said it particularly regrets the offense and concern it has caused to so many people – including its staff and millions of loyal customers.
“We place great value on all our employees and appreciate their contributions to Dis-Chem. We stand by the undeniable imperative to continue our transformational journey. Equality, diversity and inclusiveness are important throughout Dis-Chem. We are still making good progress with this.”
DIS-CHEM IT REGRETS THE OFFENSE AND CONCERN IT CAUSED TO SO MANY PEOPLE
The Dis-Chem Board says it has always been aware of the need to comply with all legislation, including employment equity, to meet transformation targets, with a priority of employment on merit, based on their view to give priority to previously disadvantaged communities.
“We apologize for the erroneous communication that offended any South African community. We are a proudly South African company that promotes inclusivity and representation of all South Africans in their capacity as key stakeholders.”
Dis-Chem confirmed in November last year that the ban on the promotion and appointment of white workers had been abandoned.