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And Now It's Illegal for Wal-Mart to....

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There are two common practices in Mexico. 1) to pay part of an employee's salary in grocery vouchers (accepted by various supermarkets), 2) to give employees a discount on their employer's products or services.

Wal-Mart in Mexico does that, too, except it issues an electronic voucher card valid only at Wal-mart stores or its affiliates (like Sam's Club and various restaurants).

Well, the Mexican Supreme Court declared such practice illegal. Why? Because it "forces" employees to shop at Wal-Mart, and that's like the classic "company store" scheme.

For starters, the payment in vouchers is optional, not all employers do it. In fact, the practice was born from the fact that a percentage of salaries paid as benefits were exempt from payroll taxes (for both employee and employer), therefore the grocery vouchers, meal vouchers and gas vouchers became popular. That's no onger the case, but employees have grown used to them, so most employers ahve kept the practice. Second, accepting partial payment in vouchers is also optional, not all employees who are offered vouchers take them; they can opt for cash or a different kind of benefit. Third, this also applies to Wal-Mart employees, who can take that pay home in cash if they choose; only most of them don't so choose.

The ruling says Wal-Mart has to issue vouchers accepted at all other supermarkets as well. There's no word on what happens to the employee discount. I do sonder is this isn't an anti Wal-Mart law. I'm pretty sure employees at the other big supermarket chains like Soriana and Comercial Mexicana also get vouchers exclusive for their stores and affiliates.

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The ruling says Wal-Mart has to issue vouchers accepted at all other supermarkets as well. There's no word on what happens to the employee discount. I do sonder is this isn't an anti Wal-Mart law. I'm pretty sure employees at the other big supermarket chains like Soriana and Comercial Mexicana also get vouchers exclusive for their stores and affiliates.

Can Wal-Mart just discontinue the practice, rather than issuing vouchers? After all, cash is kinda like a universal voucher, no?

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Can Wal-Mart just discontinue the practice, rather than issuing vouchers? After all, cash is kinda like a universal voucher, no?

I think Wal-Mart is less likely to refuse to honor one of its vouchers.

Seriously, the Mexican government had the bad habit to demonetize old currency. The moment the first 20 peso coin appeared, no one would even look at the older 20 peso bills, much less take them, except the banks. That has changed, now any old currency is exchangeable at face value.

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That does seem strange for a government to make that ruling.

I could see their fear of Walmart turning into a monopoly, but it doesn't seem like a problem if the company offers its employees cash.

It seems like that would be the employee's choice, and if the case may be that they would get less cash than the value of those coupons; I could maybe understand the frustration but, that does not justify it by any means.

Thats a very strange ruling, if the decision was in my hands, I would only hand out cash and refuse the coupons.

When you open a store in another country, you have to be willing to conform to their culture which in Mexico, happens to be handing out coupons.

Universal Declaration of Rights; Article 29-

In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society.

<_< I don't like the UN.

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Universal Declaration of Rights; Article 29-

In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society.

This might be okay if the UN understood what rights really are, and what are real rights.

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When you open a store in another country, you have to be willing to conform to their culture which in Mexico, happens to be handing out coupons.

Walmart did more than that.

50 years ago the first supermarket chains in Mexico were being born. The largest eventually was one called Grupo Cifra, made up of supermarkets, deparment stores and restaurants. Walmart set upa joint venture with Cifra, adding Sam's Club to the country. The partnership was very profitable, so eventually Walmart acquired Cifra and renamed the company Nueva Walmart de Mexico.

There was, at the time, a lot of whining and complaining about foreigners buying up the country and destroying its commercial institutions. But Walmart has kept to the cifra bsuiness mdoel, only expanding it with more locations and adding the Walmart stores and Supercenters. In fact Walmart is celebrating its 50th anniversary this year, implying that it merged with Cifra rather than merely taken it over.

It has also had a benneficial effect on the competition. Of course they ahd hard times and had to slash costs and prices to keep up. But keep up they did (some of them) and are now making Walmart try to keep up in some markets. In the north of the country Soriana holds sway and Walmart is a definite second. The Chedrahui group exploded into the scene and acquired Careefour's operations in Mexico.

<_< I don't like the UN.

Does anyone? Anyone rational, that is.

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