DORTMUND, Germany [FNS] -- Wal-Mart here said last week an investigation by the German Cartel Office over pricing of its private-label lines has indicated the company is not selling below cost. SN was unable to reach German authorities for comment.
The cartel office had disclosed early last week that it had received a complaint -- reportedly from a rival retailer -- that Wal-Mart and four other companies were selling some private-label products below cost, which is illegal in Germany.
The probe, which initially centered on Wal-Mart, was later widened to include discounters Aldi, Lidl & Schwartz, Plus and Norma. It was unclear late last week what the cartel office's findings were in its investigation of the other companies.
Suzanne Mueller, a Wal-Mart spokesperson here, told SN last Thursday the cartel office has concluded that Wal-Mart is not selling merchandise below cost. "Their investigation confirmed the information we had submitted to them," Mueller said.
The investigation of Wal-Mart involved Smart Price, one of the chain's two private-label lines at its 95 German stores. The line covers 80 basic grocery products, which will increase to about 120 by the end of the year, Mueller said.
She also said Wal-Mart provided the cartel office with data, including the wholesale and retail prices of the Smart Price line.
Wal-Mart entered the German market three years ago with the acquisition of the Wertkauf and, later, the InterSpar chains.
Wal-Mart's low prices and strength in logistics and marketing have sent shock waves through Germany, with Aldi and Lidl reacting to its arrival by cutting some prices by up to 25%.
In the United Kingdom, Wal-Mart's $10.8 billion purchase of Asda has also put increased pressure on prices in Britain, and European observers believe the Asda purchase was one of the driving forces behind last year's merger of Carrefour SA and Promodes SA in France, which created the world's second largest food retailer.
Wal-Mart's policies on low prices, opening hours and no-quibble returns have continually run afoul of Germany's labyrinth of laws to protect small shopkeepers. The laws make Germany one of Europe's most regulated retail markets -- and one of the most difficult for overseas retailers.
