Walmex Faces Antitrust Fine Amid Allegations of Supplier Coercion

Mexico's antitrust agency Cofece fined Walmart's Mexican unit, Walmex, for monopolistic practices related to suppliers. Walmex plans to appeal, arguing the agency's analysis is flawed. Markets reacted positively, as the penalty was less severe than anticipated. The case follows a 2019 investigation into Walmex's supplier practices.

Mexico's antitrust authority, Cofece, has fined Walmart's Mexican subsidiary, Walmex, over $4.6 million for alleged monopolistic behavior involving suppliers, according to a statement by the retailer. Despite expressing disappointment, Walmex announced its intention to appeal the ruling, insisting that the analysis presented by Cofece had errors.

Shares of Walmex experienced a notable rise, exceeding 5% on Friday, as market analysts commented that the financial penalty was less severe than potentially expected. Banco Bradesco analyst Rodolfo Ramos remarked that the decision avoided the more extreme outcomes such as the imposition of divestments or heavier fines.

This case, emerging from a lengthy four-year investigation prompted initially by a Reuters report, highlights the broader competition concerns within Mexico's retail sector. While Cofece accused Walmex of manipulating supplier terms, the retailer maintains its practices were lawful.

(With inputs from agencies.)