Puerto Rico Justice Dept. files complaint against Econo

Written by  //  April 17, 2013  //  Government  //  No comments

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Econo's distribution center in Carolina.

Econo’s distribution center in Carolina.

The Puerto Rico Justice Department’s Office of Monopolistic Affairs announced Tuesday it has filed a complaint against Supermercados Econo Inc. for violations to fair competition rules after failing to notify about recent changes in its grocery store chain’s composition.

Econo is what is known as a voluntary chain, an exception included in the Statute of Monopolies to allow small independent companies to join forces in purchasing, marketing and sales to compete against companies with greater turnover.

These types of voluntary chains have to be certified every two years by Puerto Rico Trade and the Monopolistic Affairs office. The chains must also abide by Puerto Rico Trade regulations that order them to notify Justice Department of any changes in their composition, said Jesús Alvarado-Rivera, deputy secretary of the agency’s Monopolistic Affairs division.

“We have information that Econo has opened at least one new store in Cayey, which did not exist at the time the last certification was granted to the voluntary chain. This means a change in the chain’s composition, which had to be previously notified to the appropriate agencies,” said Alvarado-Rivera.

He added that since the opening of the new facility was not notified in accordance with applicable laws and regulations, it is a “violation to be addressed as soon as possible to ensure compliance with fair competition rules,” the government official said.

Attempts to reach Econo representatives were unsuccessful Tuesday.

Econo must present the required paperwork to the aforementioned agencies as soon as changes in its composition occur.

“If the chains don’t report these changes when they occur, we can not ensure that their presence in the market is not excessive, representing harm to competition. Otherwise, companies could abuse the advantages granted through the voluntary chains exception,” Alvarado-Rivera added.

Supermercados Econo was founded in 1970 in Hato Rey and has close to 60 individually-owned stores throughout the island that employ about 5,000 people. The company has a distribution center in Carolina that supplies inventory to store owners who leverage their combined volumes to drive down costs.

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