Wal-Mart and Massmart should increase their planned fund to support South African suppliers to at least 500 million rand from 100 million rand, the country's largest service industry union said on Monday.

The South Africa Commercial, Catering and Allied Workers Union (SACCAWU) also said in a statement it wants a guarantee that Massmart will not decrease its domestic procurement.

Wal-Mart in June finalised its $2.4 billion purchase of a majority stake in discount retailer Massmart, but three government departments and the union have appealed the deal, saying they want further concessions on domestic procurement.

SACCAWU is calling for Wal-Mart and Massmart to increase their supplier development fund to at least R500 million from the agreed R100 million, the union said in a statement handed to reporters at a briefing.

And for the companies to be prevented from spending less on domestic procurement than Massmart spent on domestic procurement ahead of the merger.

The union also said it wanted Massmart to reinstate 574 previously fired workers.

COSATU, the 2 million member labour federation to which SACCAWU belongs, said it was ready to strike if the appeal should fail. It said its members would also picket the homes of directors of major South African retailers.

The two-day appeal against the conditions of the deal is scheduled to begin on October 20.