Drug cartel demands are now affecting even the biggest companies in Mexico, and gangs are attempting more and more to control the distribution, price, and sale of certain products.
Even well-known, powerful business executives are not protected.
The chairman of the Tamaulipas State Business Chambers’ Federation, which is located across the Texas border, complained about drug cartel extortion in the state in television interviews on Monday. Tuesday, a few hours later, Julio Almanza was shot and killed in front of his Matamoros, Texas, offices, which are located across from Brownsville.
In one of his final interviews, Almanza declared, “We are held captive by criminal organizations and subject to requests for ransom.” In Tamaulipas, demanding extortion money has all but become a national pastime.
The issue escalated when the Femsa firm, which runs the biggest chain of convenience stores in Mexico, Oxxo, said late last week that it was closing all 191 of its stores and seven petrol stations in Nuevo Laredo, another border city, due to gang issues.
According to the corporation, it has been dealing with cartel requests for its gas stations to get their fuel from specific wholesalers for a long time. However, the straw that broke the camel’s back came a few weeks ago when two store employees were kidnapped by gang members who demanded they serve as informants or lookouts for them.
The majority of people in Mexico utilize convenience stores, therefore gangs view them as useful locations to monitor the movements of competitors, police, and troops.
Roberto Campa, director of corporate affairs at Femsa, told local media, “There have been instances in which gangs have requested information from us in stores, even going so far as to kidnap two coworkers in order to get what they wanted.”
Femsa said in a statement on Monday that “acts of violence that put our colleagues’ safety at risk” are the reason why its Nuevo Laredo stores are closed this week.
Smaller companies have long been the target of cartel violence in Mexico since the owners are frequently abducted or contacted by gang members demanding extortion payments when they visit their establishments. However, Femsa is listed on the Mexican stock exchange, as the biggest soft drink bottler in Latin America, and the largest Coca-Cola bottler by volume of sales.
The Northeast gang, a branch of the former Zetas gang, has long controlled Nuevo Laredo, but larger businesses across the country are beginning to experience the issue. Industry cartels have affected everything from consumer goods to mining, fisheries, and agriculture. Their goal has been to virtually take over these sectors.
Large Mexican, American, or global firms often make up the membership of the American Chamber of Commerce, which last week announced the results of a study it conducted among its members. Of those surveyed, 12% claimed that “A portion of the sales, distribution, and/or pricing of their products are now under the control of organized crime.”
This implies that drug cartels are manipulating certain aspects of Mexico’s economy, such as determining who is allowed to sell a product and at what price, and that they are apparently demanding that vendors give them a portion of the proceeds from sales.
In the past, cartels have used violence, fire, and even the murder of people who are discovered to be selling commodities that they have not “approved” or that they have not purchased from distributors under their control.
Approximately 50% of the 218 businesses surveyed by the American Chamber reported that attacks had occurred on trucks transporting their goods, and 45% of the businesses indicated they had been the target of extortion demands demanding money in exchange for protection.
Out of all the organizations who disclosed the amount of money they had to spend on security, 58% said they used between 2% and 10% of their overall budgets for security, and 4% stated they used as least a tenth of their entire expenditures.
In a statement released on Tuesday, Femsa claimed that negotiations with the relevant authorities were moving forward, perhaps leading to assurances for worker safety and the chain’s ability to reopen its Nuevo Laredo locations.
Strong drug cartels in Mexico have increased their revenue streams by extorting cash from businesses and even assuming control of respectable companies.
Authorities verified in 2014 that the Knights Templar cartel had virtually taken over the export of iron ore from the Mexican state of Michoacan in the west and that the ore trade with China had grown to be possibly the organization’s largest source of income.
Additionally, cartels are said to have manipulated domestic prices and production of products such as avocados and limes.
Furthermore, Michoacan officials reported late last year that one cartel had installed its own improvised internet infrastructure and warned the community that if they did not pay to use its Wi-Fi, they would be killed.
The cartel’s setup, which the local media dubbed “narco-antennas,” consisted of internet antennas installed in several locations using equipment that was taken. About 5,000 people were charged increased rates by the group, ranging from 400 to 500 pesos ($25 to $30) per month.
Because Femsa’s Oxxo convenience stores are so common in Mexico—there are over 20,000 of them countrywide—they are also a target. In 2022, gangs in the central state of Guanajuato set fire to roughly twenty-dozen establishments in protest of efforts to apprehend a cartel head.
The recommendations that the authorities had given to Femsa during a meeting on Monday were presented to President Andrés Manuel López Obrador on Wednesday. Obrador’s approach is to refrain from taking on the cartels. These recommendations, which asked the corporation to install panic buttons, hire security guards within the stores, and install cameras outside the businesses, mostly put the onus of duty on the business.
At least four severed heads were discovered by authorities in the western state of Jalisco in 2009 inside Styrofoam coolers bearing the store’s brand. Although these coolers were intended to contain cold drinks, it became kind of a gang tradition to use them to house beheaded heads.