Cofece will verify compliance with the measures for 10 years and could fine the company up to 8% of its sales if it does not comply.
Mexico's Federal Economic Competition Commission (Cofece) determined on Monday that Walmart's local unit engaged in illegal conduct in the supply and distribution of products such as food and beverages, among others, and imposed 10-year sanctions.
Cofece said in a statement that it will verify compliance with the measures for 10 years and could fine Wal-Mart de México (Walmex) up to 8% of its sales if it does not comply.
The regulatory authority explained that for 13 years, Walmart used its market power to impose abusive conditions on its suppliers, obtaining illegal advantages over its competitors. The unit of the American retailer had a system that allowed it to impose discretionary discounts to force its suppliers not to give better prices and conditions to other self-service stores in Mexico, seriously affecting them, especially small and medium-sized suppliers.
The Cofece Plenary fined Walmart, ordered it to stop these illegal behaviors and prohibited it for the next 10 years:
- Retaliate against its suppliers (such as penalizing or terminating contracts) as a result of the business relationships they have with other self-service stores.
- Demand or impose prices on your suppliers so that they are able to make attractive offers to other self-service stores.
- Request information from suppliers about prices or conditions they offer to other businesses.
- Apply discounts to the prices at which you purchase products without the prior express consent of the supplier.
Additionally, the resolution orders Walmart to:
- Update your internal policies, guidelines and contracts to comply with the resolution.
- Establish a communication channel for suppliers to report any irregularities that go against the resolution.
- Implement an antitrust compliance programme and appoint a senior compliance officer.
