Mexico’s Walmex considers selling restaurant business

Reuters, 6/14/2013

Wal-Mart de Mexico, Mexico’s largest retailer, surprised analysts on Friday by saying it may sell its restaurant unit, including the popular Vips chain, after receiving interest from potential buyers. Walmex, which is controlled by Wal-Mart Stores Inc, has reported weak same-store sales recently, but is not in need of cash, analysts said.

“Part of the reason is that there have been third parties in the past who have expressed interest (in the restaurants),” Walmex spokesman Antonio Ocaranza told a local radio station. “As a responsible company, we should respond to what may be of interest to our shareholders,” he added. The group of 364 restaurants, which accounts for only a fraction of Walmex’s profits, may fetch between $600 million and $700 million, estimated one analyst who requested anonymity because he was not authorized to talk to the media.

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Mexico’s Robust Wind Energy Prospects Ruffle Nearby Villages

National Geographic, 2/7/2013

Largely thanks to Oaxaca’s unique geography, Mexico’s wind power capacity expanded to 1,350 megawatts in 2012, according to reports from a national wind industry conference in Mexico City last month, marking nearly a 140 percent expansion in capacity in a single year. Stands of the turbines now fill Oaxacan horizons, with more planned as developers pour millions of dollars into wind farms. While bringing development to the isolated area, the turbines have disrupted pastoral lifestyles and divided villages over leasing fees and other benefits promised to local communities.

The projects have arisen with strong support from Mexico’s central government. Before leaving office in December, Calderón was seen as an active proponent of wind power. The projects also have the participation of well-known Mexican companies, including cement maker Cemex and retailer Walmart de Mexico.

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Walmart scales back Mexico plans

Financial Times, 6/21/12

Walmart Mexico said on Wednesday that it expected to open 325 to 335 new stores  this year, a reduction from plans announced in February to open 410 to 436. It  said total investment this year would be cut to 17.5bn pesos from 19.7bn pesos.

Without referring to the bribery allegations, it said: “The revision to the  expansion programme is primarily due to additional steps the company is adding  to its real estate process that extends the average time required to open a  store.”

According to allegations in the New York Times in April, Walmart  paid bribes to secure new store permits in Mexico and then hushed up the  practice more than six years ago. Last year Mexico made up 6.5 per cent of its  total sales.

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Op-ed: The Sun, the Moon and Walmart

The New York Times, Homero Aridjis, 5/1/12

A CHILD in Mexico soon learns that corruption is a way of life, and that to get ahead in school, work and politics, “El que no transa, no avanza” – loosely, “You’re not going anywhere if you don’t cheat.”

When I was in junior high school, my history teacher sold us lottery tickets, promising that the more we bought, the higher our grades would be. The winning number, he said, would coincide with the National Lottery winner. I happened to buy that number and received the highest grade, but because he kept the tickets, I never got the money.

Years later, as president of an environmental activist organization called the Group of 100, I was offered visits to Las Vegas (chips provided), cars (drivers included), cash and even prostitutes in exchange for staying silent. But my most uncomfortable experience was in 1988, when I met with the secretary of Fisheries to protest the killing of dolphins by tuna fishers. He asked me, “What’s your problem?” “I don’t have any problems,” I replied. “How can I help you?” “Make the tuna fleet stop killing dolphins.” He reached for his checkbook. “Let’s talk money, how much do you want?”

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New York Pension Funds to Challenge Wal-Mart

The New York Times, 4/30/12

Concerned about Wal-Mart’s reported cover-up of bribery in its Mexico operations, leaders of New York City’s pension funds said Monday they would vote their 4.7 million company shares against five directors standing for re-election to the retailer’s board at its annual shareholder meeting next month.

It was unclear whether other investors would join the city pension funds and vote against Wal-Mart’s directors. Board members at some large public companies have come under fire from shareholders at annual meetings this year, but most of the opposition has been related to executive pay practices. It is unusual for board members to be unseated by a shareholder vote.

With Wal-Mart’s internal practices under the microscope, however, some investors said the company’s annual meeting could be contentious.

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Mexico scandal pressures Walmart in US

The Boston Globe, 4/30/12

In Los Angeles, a Walmart building permit is getting a once-over. In New York, the City Council is investigating a possible land deal with the retailer’s developer in Brooklyn. A state senator in California is pushing for a formal audit of a proposed Walmart in San Diego. And in Boston and its suburbs, residents are pressuring politicians to disclose whether they took contributions from the company.

All of it in the past week.Walmart has worked hard to polish its reputation and give elected officials, community groups, and shoppers a reason to say yes to their stores. Now, the revelation of a bribery scandal involving the retailer’s Mexican subsidiary is giving critics a new reason to say no.

“Overnight, the environment has shifted in terms of Walmart’s strategy in big cities, in winning over local politicians,’’ said Dorian T. Warren, a political science professor at Columbia University who is writing a book about Walmart’s efforts to expand into Chicago and Los Angeles.

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Mexico Seen Losing Capital Over Bribe Ethos That Snared Wal-Mart

Bloomburg-Businessweek, 4/25/12

Tyson Foods Inc. (TSN) (TSN) was searching for a way to speed up Mexican approval to export chickens raised in that country in the mid-2000s. Company employees, Tyson later acknowledged to U.S. authorities, achieved this by paying off local officials.

The decision ended in Tyson, the largest U.S. meat processor, paying regulators $5.2 million last year. Siemens AG (SIE), Europe’s largest engineering company, made a more expensive mistake, paying $1.6 billion in fines and criminal and civil penalties in 2008 for violating the U.S. Foreign Corrupt Practices Act in markets including Mexico.

Corruption is one of the biggest obstacles to foreign investment in Mexico, watchdogs and local attorneys say, and it has now ensnared Wal-Mart Stores Inc. (WMT) (WMT), the world’s largest retailer. The New York Times reported April 21 the company’s Mexican unit paid more than $24 million in bribes to open stores more quickly. The company says it’s aiding U.S. probes into the matter.

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MetLife says former Wal-Mart exec leaves board

Bloomberg-Businessweek, 4/24/12

The former head of Wal-Mart’s Mexico operations is stepping down from his current board positions at MetLife, effective immediately. The insurance giant announced Tuesday afternoon that Eduardo Castro-Wright had resigned “due to personal reasons.”

Castro-Wright was leading Wal-Mart de Mexico at the time of an alleged widespread bribery scheme there. The New York Times reported last weekend that Castro-Wright was the driving force behind millions of dollars in alleged bribes given to Mexican officials in exchange for speedier building permits and other favors to help it expand aggressively in the region.

Experts say Castro-Wright could face federal criminal charges. On Tuesday, MetLife filed a letter with the Securities and Exchange Commission from Castro-Wright and addressed to MetLife CEO and Chairman Steven Kandarian.

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Mexico won’t investigate alleged Walmex bribes

The Wall Street Journal, 4/23/12

The Mexican government said late Monday it sees no need to itself investigate retailer Wal-Mart de Mexico SAB amid allegations that the company paid bribes in Mexico to speed permits for new store openings.

The office of President Felipe Calderon said in a statement that, if the accusations are true, then the issue is a local matter as bribes for construction and other permits would have been paid to municipal or state officials. Nonetheless, the federal government said that it will follow the case closely and assist U.S. authorities as they look into the allegations. The president’s office also said it’s committed to promoting fair competition among businesses operating in Mexico and that it rejects all forms of corruption.

Wal-Mart de Mexico, also known as Walmex, said Saturday that it’s cooperating with an investigation by its parent company, Wal-Mart Stores Inc. WMT -1.27% , into allegations that Walmex employees made a series of illicit payments to local government officials in Mexico prior to 2006. Executives at both the parent company and its Mexican subsidiary were informed of the allegations in 2005, according to an article published in the New York Times.

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Little outrage in Mexico for Wal-Mart bribe report

Associated Press, 2/24/12

Allegations that U.S. retail giant Wal-Mart used bribes to speed its break-neck Mexican expansion are sparking some soul-searching in Mexico, but not the outrage that the scandal has provoked in the United States.

While Wal-Mart says it is probing the allegations and U.S. Congress members are demanding answers, Mexican authorities say they have nothing to investigate. The charges have, however, focused fresh attention on Mexico’s long-entrenched culture of bribery, a place where crowded government offices remain the working grounds of shadowy facilitators known as “gestores.” Although Mexicans are aware such payoffs occur, most would prefer to pretend it doesn’t exist.

Wal-Mart’s bribes in Mexico “are a scandal in the United States,” Luis Miguel Gonzalez, editorial director of El Economista newspaper noted in a Monday column. “Here we live in a different way. Over there, there are expressions of indignation … In Mexico authorities take more than 50 hours to react” to the first news reports that made the charges.

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