MEXICO CITY (Reuters) -Mexico’s antitrust watchdog Cofece said on Monday it could fine Walmart’s (NYSE:) local unit Walmex of up to 8% of its revenue if it fails to comply with a resolution banning the retailer from engaging in engage in certain activities. behavior that is considered illegal.
Cofece’s statement offered more details about a ruling Walmex reported on Friday, in which the regulator ordered the company to pay a fine of more than 93 million pesos ($4.62 million) for participating in a monopolistic practice involving its suppliers.
“For thirteen years, Walmart has used its market power to impose abusive terms on its suppliers, gaining illegal advantages over its competitors,” the watchdog said in the statement, outlining several bans it imposed on America’s largest retailer Mexico.
According to the statement, Walmart de Mexico, better known as Walmex, “had a system that allowed it to impose discretionary discounts, which put pressure on its suppliers not to offer better prices and conditions to other retailers, causing them serious harm, especially small and medium-sized businesses.” companies.”
Walmex did not immediately respond to a request for comment on Cofece’s statement, but said on December 13 that it believes the regulator’s analysis is incorrect and will appeal the ruling.
Cofece said on Monday it had banned Walmex from retaliating against suppliers in the form of sanctions or terminating contracts in retaliation for the supplier’s commercial relationships with other cash-and-carry stores.
The antitrust agency said it also prohibits Walmex from demanding or imposing prices on its suppliers and requiring its suppliers to provide information about the prices or terms they offer to other companies.
“Cofece will monitor compliance with the measures for ten years and may impose a fine on Walmart of up to 8% of its revenues if it does not comply with this resolution,” the regulator said.
Cofece is one of several autonomous government watchdogs that Mexico’s Congress abolished last month, while giving its competition oversight powers to other government agencies under the president’s direct control.
The watchdog’s resolution followed a roughly four-year investigation into Mexico’s largest private employer, which also operates stores in Central America.
Markets reacted positively after Walmex initially reported the fine, with analysts noting that the roughly $4.6 million fine could have been worse for the company, which reported net income of more than $650 million in the third quarter.
($1 = 20.1190 Mexican pesos)
