In a statement sent to the local stock exchange on Friday, Walmex said it had allegedly engaged in a monopolistic practice "in relation to contributions from distributors."
Mexico's competition regulator Cofece has determined that Walmart's local unit, known as Walmex, engaged in monopolistic practices involving its distributors, the company said Friday.
As a result of the ruling, Cofece imposed a fine of nearly 93.4 million pesos (about US$ 4.62 million at Friday's exchange rate) on Wal-Mart de México, which announced it will appeal the decision.
The investigation against Wal-Mart de México, the largest retail chain in the Latin American country, began in mid-2020 following a complaint from its competitor Chedraui regarding alleged relative monopolistic practices in the market for the supply and wholesale distribution of consumer goods, their retail marketing and related services.
In a statement sent to the local stock exchange on Friday, Walmex said it had allegedly engaged in a monopolistic practice "in relation to contributions from distributors."
"Cofece acknowledges that Walmex can continue negotiating contributions with its suppliers, except for two specific contributions of the four originally investigated," the retailer said.
The company said it believes the competition authority's analysis is "incorrect" and that the agency "made mistakes in applying the law."
"Due to the irregularities in Cofece's investigation and procedures, Walmex will challenge the decision," he added.
In the past, Walmex, the country's largest private employer, has denied having "substantial power" and maintains that Cofece "failed to meet its burden of proof," asserting that it has the fundamental right to the presumption of innocence and that the study "makes direct accusations against Walmart."
He also claims that he was not allowed an adequate defense.
The authority claims that Walmart has "secretly imposed" prices and conditions on suppliers of reference products due to the suppliers' alleged economic dependence.
Markets reacted positively to the announcement, with Walmex shares on the Mexican stock exchange rising more than 4% shortly after the opening on Friday following the decision, to 60.25 pesos (US$2.98).
Since the investigation was made public in October last year, Walmex shares have lost up to 20% of their value from 66.77 pesos (US$3.31) at the end of September.
"Our initial reaction is that the decision rules out the most worrying scenarios of forcing divestment or imposing large fines," said Rodolfo Ramos, an analyst at Banco Bradesco.
Ignacio Caride, Walmex's CEO, said in early October that an unfavorable ruling could force the company to adjust its operations, but would not affect announced investments.
The Congress, dominated by the ruling party, recently approved the elimination of autonomous bodies - including Cofece -, claiming that it could save up to US$ 5 billion annually.
The opposition said the reform puts democratic progress and transparency in the exercise of public office at risk. In addition, experts warned that it could contravene the North American trade agreement, USMCA, which is why it was subject to adjustments before being approved by the lower house.
