Mexico’s Federal Economic Competition Commission (Cofece) has sanctioned Walmart’s Mexican subsidiary Walmex for alleged anti-competitive practices with its suppliers.
Walmex is facing a monetary penalty of 93m pesos ($4.6m), which the company plans to contest, citing disagreements with the regulator’s findings.
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In October 2023, Walmex revealed that it is set to face an anti-trust panel for allegedly engaging in monopolistic practices.
A company statement read: “Walmex is disappointed by this decision but will continue working collaboratively with its supplier to ensure business continuity in compliance with Cofece’s resolution while challenging the decision,” adding that the ruling by Cofece’s governing body was not unanimous.
The retailer challenged the regulator’s 900-page decision, asserting that there were legal misapplications in its conclusion.
Despite this setback, Reuters reported that investor sentiment appeared resilient, with Walmex shares on the Mexican stock exchange rising more than 5%.
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By GlobalDataThe sanction is the culmination of an extensive four-year probe into Mexico’s leading retailer, which also has a presence in Central America.
The investigation has scrutinised allegations that Walmex was dictating prices and conditions to its suppliers or distributors, indicative of a broader issue of insufficient competition within various regions of Mexico’s retail landscape.
Walmex has consistently defended its practices, asserting that it operates within legal parameters.
The inquiry was partly instigated by a 2019 Reuters exclusive report revealing that Walmex had imposed sanctions on food companies that also supplied Amazon, compelling some to withdraw their products from the e-commerce giant.
In its recent statement, Walmex noted that while Cofece’s ruling restricts certain supplier negotiations, it does permit continued bargaining in all but two instances among the four originally scrutinised scenarios.
As Mexico’s largest private-sector employer, Walmex has given reassurances that it does not foresee any significant operational repercussions from the ruling.
Its share value has seen a downturn since news of the investigation broke in late 2023. From a high of 66.77 pesos at the end of September 2023, it had declined to 57.10 pesos by 11 December. 2024.
