The Dow Jones news service reports that Mexico’s federal level antitrust agency has ended its investigation of Wal-Mart’s purchasing practices with its vendors. The federal agency however insisted that Wal-Mart agree to a new “code of conduct” for dealing with its suppliers. The government investigation of Wal-Mart began last year, when the Federal Competition Commission became concerned that Wal-Mart was using its market share to pressure its suppliers to lower their prices to the retail chain. Wal-Mart controls an incredible 50% of the grocery business in Mexico through its network of 600 Mexican stores. At the end of 2002, Wal-Mart was operating in Mexico under a variety of names: Bodegas (106), Suburbias (51), Superamas (44) and VIPS (242). The company also had 62 Supercenters, and 46 Sams Clubs. Wal-Mart sales in that year were around $10 billion, which is a major part of the company’s $36 billion international market. Investigators told Dow Jones that they found evidence that Wal-Mart was pressuring suppliers to lower prices, but they fell short of violating Mexican anti-competition laws. The governrment said that the new code to use for suppliers would also be used by Wal-Mart’s nearest rivals, such as Controladora Comercial Mexicana SA, and the Gruop Gigante.
Usually federal anti-trust laws — of any nation — are so complex and convoluted that reaching a determination of anti-trust activity is like riding on the back of a turtle: you have the impression of going somewhere, but you never reach the destination. Caselaw has only made the whole process more complex. The fact that Wal-Mart controls half of all grocery sales in Mexico should speak for itself. In the U.S., Wal-Mart’s market share of grocery sales is less than 20% — but still ranks the company as the largest grocer in America. As we have said here many times: Wal-Mart is not the beginning of competition in your community, it is the end of competition. For more international stories about Wal-Mart, search this database by the name of the country sought.
