A major Mexican supermarket chain has been forced to shutter all of its stores in a troubled region after a striking rise in incidents involving drug cartels and gangs.
Oxxo, Mexico‘s largest chain of convenience stores, announced late last week that it was closing its 191 stores and seven gas stations in Nuevo Laredo, Tamaulipas.
The problem came to a head when Femsa corporation, which operates the chain, said they had been dealing with cartel demands concerning fuel distributors.
However, in recent weeks gang members abducted two store employees and demanded they act as lookouts or provide information to the gangs.
Since convenience stores are used by most people in Mexico, the gangs see them as good points to keep tabs on the movements of police, soldiers and rivals.
Oxxo, Mexico’s largest chain of convenience stores, announced late last week that it was closing its 191 stores and seven gas stations in Nuevo Laredo
Mexican soldiers stand guard outside an Oxxo grocery shop near the Tamaulipas Chamber of Commerce, where its president Julio Cesar Almanza was killed, in Matamoros, Mexico, Tuesday, July 30, 2024. (AP Photo/Veronica Cisneros)
Robert Campa, Femsa’s director of corporate affairs, told local media: ‘We had incidents in stores that consisted of them (gangs) demanding we give them certain information, and they even abducted two colleagues to enforce this demand.’
In a statement Monday, Femsa said its stores in Nuevo Laredo remain closed this week ‘due to acts of violence that put our colleagues safety at risk.’
Cartel violence in Mexico has long been focused on smaller businesses, where owners are abducted or approached by gang members for extortion payments.
But Femsa is the largest soft drink bottler in Latin America, the largest Coca Cola bottler by sales volume and is listed on the Mexican stock exchange.
Nuevo Laredo has long been dominated by the Northeast Cartel – an offshoot of the old Zetas cartel – but the problem is starting to hit larger companies nationwide.
Sectors ranging from agriculture, fishing and mining to consumer goods have been plagued by cartels trying to essentially take over their industries.
On Monday, Julio Almaza, head of the business chambers’ federation in Tamaulipas, gave interviews in which he complained about drug cartel extortion in the state.
Hours later on Tuesday, Almaza was shot to death outside his offices in the city of Matamoros, across from Brownsville, Texas.
Mexican soldiers stand guard near the Tamaulipas Chamber of Commerce, where its president Julio Cesar Almanza was killed, in Matamoros, Mexico, Tuesday, July 30, 2024. (AP Photo/Veronica Cisneros)
In one of his last interviews, he said: ‘We are hostages to extortion demands, we are hostages of criminal groups.
‘Charging extortion payments has practically become the national sport in Tamaulipas.’
This week, the American Chamber of Commerce, whose members tend to be larger Mexican, American or multinational corporations, released a survey of its members in which 12% of respondents said that ‘organized crime has taken partial control of the sales, distribution and/or pricing of their goods.’
That means drug cartels are distorting parts of Mexico’s economy, deciding who gets to sell a product and at what price.
In return they are apparently demanding sellers pass a percentage of sales revenue back to the cartel.
In the past, cartels have carried out violent attacks, arson and even killings of those found selling goods that had not been ‘authorized’ by them or bought from distributors they control.
Almanza, seen here, was shot to death outside his offices in the city of Matamoros, across from Brownsville, Texas
Investigators collect evidence at the site where Almanza, president of the Tamaulipas Chamber of Commerce, was killed in Matamoros
About half of the 218 companies in the American Chamber survey said that trucks carrying their products had suffered attacks, and 45% of the companies said they had received extortion demands for protection payments.
Of the companies that reported how much they had to spend on security measures, 58% said they spent between 2% and 10% of their total budgets on security; 4% spent at least a tenth of their total outlays on security measures.
On Tuesday, Femsa said in a statement that it was making progress in talks with authorities that might provide guarantees for the safety of its employees and allow the chain to reopen its stores in Nuevo Laredo.
Mexico’s powerful drug cartels have expanded their income sources by both extorting money from companies and even taking over legitimate businesses.
In 2014, authorities confirmed the Knights Templar cartel had essentially taken over exports of iron ore from the western state of Michoacan, and the ore trade with China had become perhaps its biggest single source of income.
Cartels have also been accused of controlling production and manipulating domestic prices for crops like avocados and limes.
And late last year, authorities in Michoacan confirmed one cartel had set up its own makeshift internet system and told locals they had to pay to use its Wi-Fi service or they would be killed.
Dubbed ‘narco-antennas’ by local media, the cartel’s system involved internet antennas set up in various towns built with stolen equipment.
The group charged approximately 5,000 people elevated prices between 400 and 500 pesos ($25 to $30) a month.
Femsa’s Oxxo convenience stores are a target in part because they are so ubiquitous in Mexico: there are about 20,000 nationwide.
In 2022, gangs set fires at about two dozen of the stores in the central state of Guanajuato to protest attempts to arrest a cartel leader.
On Wednesday, President Andrés Manuel López Obrador – whose policy is to avoid confronting the cartels – displayed the recommendations authorities had made to Femsa in a meeting Monday.
Those recommendations largely placed responsibility on the company, asking it to hire in-store security guards, install panic buttons and place cameras outside the stores.
In 2009, police in the western state of Jalisco found at least four severed heads in Styrofoam coolers with the stores’ logo on them; such coolers were sold to hold chilled drinks, but it became something of a trend for gangs to use them to hold decapitated heads.
