Walmart Chile Facing Supplier Suit Alleging Abuse of Market Dominance

RIO DE JANEIRO, BRAZIL – An association of Chilean food suppliers has sued the local unit of U.S. retail giant Walmart Inc, alleging that the store chain abused its dominant position in the market to impose contracts on providers and set arbitrary prices.

The suit, dated October 22nd, but recently uploaded on the website of Chile’s antitrust court, said the AGIP supplier association had made the allegations against Walmart, which operates Líder, Acuenta and Central Mayorista markets in Chile.

Walmart “exploited in an abusive manner its dominant position in the supermarket supply market, by imposing on its suppliers the contracting of certain services and establishing arbitrary values associated with them,” the lawsuit said. It added Walmart’s actions had hurt free competition.

Walmart Chile said in a statement sent to Reuters on Thursday that it had not been informed of the lawsuit, adding it was always concerned about forging a “virtuous and long-term relationship” with suppliers.

“We believe that relations with our suppliers should be governed by the principles of respect for free competition, for which we work to establish transparent objectives, terms and conditions known in advance by both parties,” it added.

The AGIP association, representing household names like Coca Cola, Nestlé, Unilever and Pepsico, asked the Chilean Tribunal for the Defense of Free Competition (TDLC) to give suppliers the right to choose between their own replacement services and that of the supermarket.

AGIP also said that Walmart had failed to comply with two conciliation agreements approved by the antitrust body and requested a fine equivalent to about US$12 million.

Source: Reuters