Mexico’s competition watchdog has imposed a fine on Walmart’s Mexican unit, Walmex, for allegedly engaging in a monopolistic practice relating to its “supplier contributions,” the company said on Friday.
Walmex stated that it was reviewing COFECE’s 900-page decision and that its preliminary review suggests the agency may have “erred in the application of the law.”
The company said that COFECE was split on the decision but did not elaborate on its reasoning. COFECE had previously accused Walmex of imposing prices and terms on its suppliers and distributors.
Walmex maintained that it operated in compliance with the laws and is planning to challenge the decision, citing the irregularities in COFECE’s investigation and proceedings.
“Walmex is disappointed by this decision but will continue working collaboratively with its suppliers to ensure business continuity in compliance with the COFECE’s resolution, while we challenge the decision,” it stated.
The decision stemmed from the agency’s investigation into Walmex which was launched in 2020 in response to a complaint by its competitor, Chedraui, accusing the company of possible monopolistic practices.
Walmex stated on Friday that COFECE acknowledged the retailer could continue negotiating payments with its suppliers, except in two specific cases from the four originally investigated.
It added that the agency had also ordered remedies that would restrict Walmex’s ability to implement those two payments despite being negotiated and agreed upon with suppliers.
The Epoch Times reached out to COFECE for comment but did not hear back as of publication time.
Walmex, a subsidiary of U.S.-based retail giant Walmart, is Mexico’s largest retail company with more than 3,000 stores. The company’s shares increased by 7.5 percent on Mexico’s stock exchange on Friday.
COFECE is among the independent agencies that could be abolished by the Mexican government following the Senate’s approval of a reform bill last month. The move aims to reduce public spending, with the agencies’ functions set to be transferred to federal government departments.
The New York City Bar Association has expressed concerns about the bill, warning that it poses a “significant threat” to institutional independence and democratic principles in Mexico.
“Eliminating these autonomous agencies and transferring their powers to the Executive Branch undermines regulatory technical expertise by returning it to the political sphere, subjecting important public decisions that impact the country’s development to political fluctuations, and potentially impacting the country’s development,” it added.
