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Wal-mart: Helpless victim of dastardly monopoly
Poor Wal-Mart. The company with an internal economy larger than all of Ireland is moaning that it isn't big enough to compete with a UK grocer. In fact, Wal-Mart has called for an antitrust investigation of U.K. chain Tesco, arguing that it has too large a share of the U.K. grocery market.
What's the matter, Wal-Mart? Afraid of a little competition? Maybe Wal-Mart should use its profits to form a standing army to invade stores that dare to sell anything on Wal-Mart's shelves.
(Thanks, Iain)
And while we are on the subject of Wal-Mart, the company is jumping into the hard liquor market. To goose sales, they plan on putting the liquor next to the guns. The liquor move appears at odds with Wal-Mart's puritan reputation; alcohol is not permitted at any company sponsored events. When asked about this seeming contradiction, a Wal-Mart spokesman did not say, "We don't let people shoot each other at the company picnic either."
Posted by Charles Star on 08/29/2005 | Permalink
Comments
If you take a few moments to look at the history of Wal-Mart’s relationship with British antitrust regulators—rather than launching into some feverish anti-Wal-Mart diatribe—you’ll see that there’s much more to Lee Scott’s call for a Tesco investigation than was reported in the British press or, for that matter, than Scott himself let on.
It appears that back in 2003, Wal-Mart’s subsidiary Asda controlled 16.9 percent of the British grocery market (slightly more than it has now), when it became the highest bidder to purchase British Safeway, a struggling chain with 12.4 percent of the grocery market.
If Wal-Mart had been allowed to purchase British Safeway, it would have controlled 29.3 percent of the grocery market. This level of market share, it turns out, was completely unpalatable to British Trade and Industry officials, who stepped in and proclaimed that it would be illegal for Wal-Mart to have that large a share of the grocery business. Fair enough, I suppose.
But now Euro retailer Tesco has achieved a 30.5 percent market share. Why is it that Wal-Mart having 29.3 percent of the market constitutes an illegal monopoly—but Tesco having an even larger share is just fine? And that, of course, was the obvious question on Lee Scott’s mind when he directed those comments at British antitrust regulators over the weekend.
We can safely assume that in reality Wal-Mart’s executives wish there were no such thing as antitrust regulations (or any other arbitrary, government-backed restraints on trade). Scott was merely noting that if antitrust laws are going to exist, they should at least be applied fairly and consistently.
Wal-Mart was standing up for fair competition and the rule of law. It was in no way being hypocritical. It was merely saying that Tesco should have to abide by the same rules that are forced on Wal-Mart.
Posted by: Form A | Aug 30, 2005 10:58:46 AM
The L.A. Times covered the story today, and Charles clearly isn't the only one smelling hypocrisy here.
Posted by: Jack Silbert | Sep 5, 2005 11:28:46 PM
