A Walmart store in the city of Mérida, Yucatán state (Mexico), in an image file.Geography Photos (Universal Images)
Walmart’s business practices in Mexico are under scrutiny. The retail giant will face an antitrust panel after a three-year investigation by the Federal Competition Commission (Cofece) found suspected abuse of its market power. Ahead of this trial, shares of Walmart de México fell by 4.93% this Monday on the Mexican Stock Exchange, trading at 60.88 pesos.
The largest retailer in Mexico, which also operates in Central America, has 45 days to present its defense. The investigation by the country’s antitrust authority began in 2020 with an official letter. At the time, the Commission relied on its own study, which showed that small businesses were disadvantaged by the harsh conditions imposed by large retail chains, such as late payments or requiring suppliers to assume the risk of unsold products. If the regulator’s investigation is confirmed, Walmart Mexico could receive a $1 million fine, equivalent to up to 8% of its income from the last year in which it may have carried out the illegal practice.
Cofece confirmed this Monday, without specifically mentioning Walmart’s name, that the company had completed its investigation into file IO-002-2020 and found probable responsibility for anti-competitive practices in the self-service stores market. “The Federal Commission on Economic Competition has cited a company for probable vertical price fixing and/or other relative monopolistic practices in the market for the supply and distribution of consumer goods through self-service store chains domestically,” he explained.
The competition regulator in Mexico stressed that both the food and beverage sector and its distribution channels are priority sectors for the Commission due to its importance in people’s purchasing power, which is why it will maintain its proactive monitoring to prosecute any anti-competitive behavior.
The company said in a statement to the Mexican Stock Exchange (BMV) that it had 45 days to present Cofece with the arguments and evidence in its defense. “Walmex is confident that it has always acted in accordance with applicable law to guarantee its customers the best prices, quality and range,” the company said in writing.
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