Mexico’s Antitrust Watchdog Summons Walmart Over Alleged Anticompetitive Practices
Investigation into Walmart’s Mexico Unit
Mexico’s antitrust watchdog, Cofece, has summoned a prominent supermarket retailer to address allegations of violating competition laws. Walmart’s Mexico unit has confirmed that it is facing a probe in response to findings of “probable responsibility” for anticompetitive practices. Following a three-year investigation by Cofece, Walmart’s Mexico unit reported that it would face an antitrust panel examining “alleged relative monopolistic practices.”
Walmart’s Response to the Probe
Walmart’s Mexico unit, known as Walmex, acknowledged receiving a notification from the authority on Friday. The company is currently reviewing the notification and has 45 business days to present its arguments and evidence. Walmex expressed confidence in having acted lawfully to ensure fair prices and product supply. The notification pertains to the supply, wholesale distribution, and marketing of consumer goods.
Implications for Walmart’s Stock
As news of the probe emerged, Walmex experienced a significant decline in its stock value, with shares down 5.5%. Analysts anticipate short-term volatility due to uncertainties regarding the impact on the company’s operations, which cannot be estimated at present.
Legal Proceedings and Potential Penalties
In response to the findings, Cofece stated that the company in question would have the opportunity to defend itself in a trial-like procedure. The allegations include “probable vertical price fixing and/or other relative monopolistic practices.” If found guilty, the company could face fines of up to 8% of its annual income in Mexico.
Consumer Goods Sector: A Priority for Antitrust Watchdog
Cofece emphasized the importance of monitoring the food and beverage sectors for anti-competitive behavior, highlighting that Mexican families spend over half of their income on consumer goods. As the largest supermarket chain in Mexico, Walmex operates 2,890 locations across the country.
