By Anthony Harrup

MEXICO CITY--Mexico's antitrust regulator said retailer Wal-Mart de Mexico used its market power to impose abusive conditions on suppliers and obtain illegal advantages over its competitors in the distribution and supply of food, beverages, hygiene and home cleaning products.

The federal competition commission, or Cofece, last week fined the unit of Arkansas-based Walmart around $4.6 million for anticompetitive practices involving the negotiation of discounts with suppliers. Walmex said Friday that its practices are legal, customary in the market, and benefit consumers. The company said it intends to challenge the decision.

In a release Monday, Cofece said Walmex had a system which allowed it to force suppliers not to extend better prices and conditions to other supermarkets, which was particularly damaging to medium-sized and small competitors.

Among remedies imposed by the commission, Walmex was ordered not to require information from suppliers about their agreements with other retailers, impose prices on suppliers, take reprisals against suppliers for their relations with other retailers, or apply discounts on products without prior consent of the supplier. The measures apply for the next 10 years, and the commission said it could fine the company up to 8% of its sales for failure to comply.

Walmex shares fell 2.7% on the Mexican stock exchange Monday, after rising 7.5% Friday when the company reported the fine.

"We maintain our view that the impact on Walmex business operations appears minimal, but noises on the progress of the changes might bring some volatility to the stock," analysts at Citi Research said in a report.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

December 16, 2024 17:14 ET (22:14 GMT)

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