In late May, Mexico’s antitrust agency, the Federal Competition Commission, opened an investigation into Wal-Mart for “monopolistic practices.” The action was prompted by charges that Wal-Mart has abused its market power by pressuring suppliers to sell goods below cost or at prices substantially lower than those available to other retailers (even after accounting for reasonable volume discounts).
Wal-Mart is Mexico’s largest retailer with 563 stores and $9.4 billion in annual revenue, three times the size of its nearest rival. Wal-Mart entered Mexico in 1997 when it purchased a controlling stake in Cifra SA, then the country’s largest retailer.
No timetable for the investigation has been announced.
Wal-Mart has been formally accused of antitrust violations on several occasions. Last year, the Wisconsin Department of Agriculture, Trade, and Consumer Protection charged the company with predatory pricing at several of its stores in an attempt to put smaller competitors out of business. Wal-Mart reached an agreement with the agency, but admitted no wrongdoing. In 2000, German antitrust authorities charged Wal-Mart with similar predatory tactics. The company is currently appealing the charges through the German courts. A private antitrust lawsuit brought by a small grocery store chain in Oklahoma is still pending.
