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Exclusive: Mexico’s Walmart pressures suppliers on pricing, forcing some to ditch Amazon

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MEXICO CITY (Reuters) – Walmart’s Mexico unit has penalized food companies supplying groceries to rival Amazon, pressure that has forced some to pull their products from the world’s largest online retailer, four people familiar with the matter said.

The tough tactics come as the two giants battle for supremacy in one of their most important foreign markets, one that Walmart currently dominates.

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Walmart last year demanded discounts from food businesses whose products it found priced lower on the Mexican website of Amazon.com Inc, the people said, even though suppliers had no say in the Seattle retailer’s decision to undercut Walmart on price.

Two suppliers told Reuters they moved swiftly to pull their brands from Amazon, wary of jeopardizing their relationship with Walmart de Mexico. The companies, both of which sell common pantry goods, said Walmart accounts for more than half their supermarket sales in Mexico.

Walmart would not discuss its competition with Amazon in Mexico or the allegations made by suppliers. It told Reuters it does not dictate with whom vendors can do business. But it acknowledged it always presses for the lowest prices, particularly if competitors are giving shoppers a better deal.

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