Mexico Blocks Retail Alliance Against Wal-Mart Unit

MONTERREY, Mexico - Mexico's antitrust regulator has blocked an alliance among three supermarket retailers seeking to reduce operating costs and cut retail prices to compete with Wal-Mart de Mexico (Walmex), Reuters Reports.

Last year retailers Gigante, Soriana, and Comerci created Sinergia, a joint purchasing group developed to obtain better prices from suppliers.

A Mexican government official with the Federal Competition Commission (CFC) said the creation of Sinergia was rejected, while noting that the retailers had 30 days to appeal.

Mexican law prohibits companies from jointly setting prices. The CFC started a probe into Sinergia in January, looking at whether the retailers' ability to negotiate prices with suppliers through Sinergia implied setting prices in blocs wherever the stores operate.

Sinergia spokeswoman Angelica Rendon was quoted as saying the venture had not been notified of the CFC resolution. An analyst from Credit Suisse said the CFC decision followed complaints by ConMexico, a consumer goods supplier association that includes companies such as the local units of Coca-Cola, Kraft Foods, and Mexico's Bimbo, the world's No. 3 bread maker.