Imposition of prices and other conditions

MEXICO, 2003

In May 2002, the FCC initiated an ex-officio investigation into presumed relative monopolistic practices regarding the imposition of prices and other conditions that suppliers must observe when selling their products to self-service stores.

Some suppliers expressed that Wal-Mart de Mexico, SA de CV (Walmex) imposed obligations to set higher minimum resale prices to Walmex competitors and threatened suppliers with not buying their products if they failed to observe this requirement. Such practices would indeed imply that self-service stores competing with Walmex would buy products at disadvantageous conditions. The relevant market was defined as the acquisition, distribution and commercialization of goods by self-service stores with a national geographic dimension. In general terms, self-service stores perform retail commerce aimed at family purchases and provide a wide variety of products. This characteristic distinguishes them from other stores, such as government, department or traditional stores.

During the investigation, the FCC required diverse information from the main selfservice stores and from several goods�� suppliers. The FCC also performed independent price and supply monitoring for representative products, which were complemented with other price studies performed by the consumer protection authority. During substantiation of the investigation proceeding, Walmex, made a commitment to indicate in writing to its purchasing departments that negotiations with suppliers must strictly be based on the costs and conditions pertaining to their clients�� interests and that they should avoid any interference or suggestion about costs that suppliers should negotiate with other chain stores. This commitment the FCC to close the file.