Puerto Rico Challenges Wal-mart Acquisition

Date: 1 Nov 2002 | posted in: Retail | 0 Facebooktwittergoogle_plusredditpinterestmail

A broad coalition has coalesced in Puerto Rico to block an attempt by Wal-Mart to buy Supermercados Amigo, the island’s largest supermarket chain. The deal would give the retailer, which already has $1.16 billion in sales at 19 Wal-Mart and Sam’s Club stores, a 40 percent share of Puerto Rico’s grocery sales.

“Before, we were fighting this alone; and now, there is a united front to fight this octopus that has come to cover the island,” Ricardo Calero, president of the 18,000-member United Retailers Association of Puerto Rico, told the Orlando Sentinel.

In rare agreement, legislators from Puerto Rico’s three major parties rapidly moved to investigate the deal, passing a resolution that calls for a 30-day probe. The resolution notes that the acquisition would severely reduce competition on the island and cites Wal-Mart’s anti-labor policies and studies that show it destroys small businesses and jobs.

Meanwhile, several grocers have filed suit in superior court in San Juan to block the purchase on antitrust grounds.

Also providing a temporary delay is the Federal Trade Commission (FTC), which must approve the acquisition. The FTC insists that Wal-Mart sell a few of Supermercados Amigo’s 38 stores to preserve local competition. But Wal-Mart has yet to find a buyer suitable to the FTC, which would prefer they be taken over by another large chain. Beyond Supermercados Amigo, Puerto Rico really has no supermarket chains.

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Independent Business Initiative, which partners with a wide range of allies to implement policies that counter concentrated power and strengthen local economies.