Walmart’s Mexican Business Unit to Challenge Antitrust Authority’s Ruling

Walmart’s Mexican business unit, Walmart de México y Centroamérica (Walmex), said a decision by Mexico’s antitrust authority will not affect its business.

The company also said in a Friday (Dec. 13) press release that it will challenge the Comisíon Federal de Competencia Económica’s (COFECE) Thursday (Dec. 12) decision that Walmex engaged in a monopolistic practice in its dealing with supplier contributions.

COFECE fined the company over $93 million pesos (about $5 million), according to the release.

The competition watchdog’s ruling came after a four-year antitrust investigation in which it interviewed suppliers and other retailers to determine whether Walmex engaged in unfair practices, Bloomberg reported Friday.

The $5 million fine it imposed amounts to a “tiny fraction” of Walmex’s revenue and eliminates the risk of heavier penalties and other actions, according to the report.

The ruling’s enforcement is complicated by the fact that Mexico’s congress approved a bill to eliminate COFECE and other regulators, with all antitrust efforts being overseen by an Economy Ministry agency, per the report.

“COFECE recognizes that Walmex can continue negotiating contributions with its suppliers except for two specific contributions out of the four originally investigated,” Walmex said in the release. “COFECE ordered remedies that limit the ability of Walmart to implement those two contributions even though they are negotiated and agreed with suppliers and are customary in the market and benefit consumers.”

Walmex also said in the release that it believes COFECE’s decision is flawed and that the company will challenge it. In the meantime, it will continue working with its suppliers in compliance with the antitrust authority’s resolution.

“Since Walmex and its subsidiaries believe they have acted in compliance with applicable laws to the benefit of Mexican families, and due to the irregularities in COFECE’s investigation and proceedings, Walmex will challenge COFECE’s decision,” the release said.

The inquiry began after accusations that Walmex was dictating prices and contract terms to partners, a practice that could constitute “relative monopolistic practices.”

Walmex has consistently denied any wrongdoing, maintaining that its business practices are fully compliant with the law and that its actions were taken in the interest of providing competitive prices and ensuring a reliable supply of products to consumers.