A major Mexican supermarket chain has been forced to close all its stores in a troubled region after a shocking rise in incidents involving drug cartels and gangs.
Oxxo, Mexico’s largest convenience store chain, announced last week that it would close its 191 stores and seven gas stations in Nuevo Laredo, Tamaulipas.
The issue came to a head when the Femsa corporation, which operates the chain, said it had been dealing with cartel demands over fuel distributors.
However, in recent weeks gang members kidnapped two store employees and demanded that they act as lookouts or provide information to the gangs.
Since convenience stores are used by the majority of people in Mexico, gangs see them as good spots to monitor the movements of police, soldiers and rivals.
Oxxo, Mexico’s largest convenience store chain, announced late last week that it would close its 191 stores and seven gas stations in Nuevo Laredo.
Mexican soldiers stand guard outside an Oxxo grocery store near the Tamaulipas Chamber of Commerce, where its president Julio Cesar Almanza was assassinated, in Matamoros, Mexico, Tuesday, July 30, 2024. (AP Photo/Veronica Cisneros)
Robert Campa, Femsa’s corporate affairs director, told local media: “We had incidents in stores where they (the gangs) demanded certain information from us, and they even kidnapped two colleagues to enforce that demand.”
In a statement issued Monday, Femsa said its stores in Nuevo Laredo remain closed this week “due to acts of violence that put the safety of our colleagues at risk.”
Cartel violence in Mexico has long focused on small businesses, where owners are kidnapped or accosted by gang members to demand 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.
New Laredo has For a long time it has been dominated by the Northeast Cartel. – an offshoot of the former Zetas cartel – but the problem is beginning to affect larger companies across the country.
Sectors ranging from agriculture, fishing and mining to consumer goods have been affected by Cartels are basically trying to take over your industries..
On Monday, Julio Almaza, president of the federation of business chambers of Tamaulipas, gave interviews in which he complained about extortion by drug cartels in the state.
Hours later on Tuesday, Almaza was shot dead 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 assassinated, in Matamoros, Mexico, Tuesday, July 30, 2024. (AP Photo/Veronica Cisneros)
In one of his last interviews he said: ‘We are hostages of extortion demands, we are hostages of criminal groups.
‘Collecting extortion payments has practically become the national sport in Tamaulipas.’
This week, the American Chamber of Commerce, whose members tend to be large Mexican, U.S. 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 products.”
That means drug cartels are distorting parts of Mexico’s economy, deciding who can sell a product and at what price.
In return, they apparently demand that sellers transfer a percentage of sales revenue to the cartel.
In the past, cartels have carried out violent attacks, arson and even murders of those selling products that had not been “authorized” by them or purchased from distributors they control.
Almanza, seen here, was shot dead outside his offices in the city of Matamoros, across from Brownsville, Texas.
Investigators collect evidence at the scene where Almanza, president of the Tamaulipas Chamber of Commerce, was murdered in Matamoros
About half of the 218 companies surveyed by the American Chamber said trucks carrying their products had been attacked, and 45% of companies said they had received extortion demands for protection payments.
Of the total number of companies that reported how much they had to spend on security measures, 58% said they spent between 2% and 10% of their total budget on security; 4% spent at least one-tenth of their total expenses on security measures.
On Tuesday, Femsa said in a statement that it is advancing in talks with authorities that could 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 revenue streams by extorting businesses and even taking over legitimate businesses.
In 2014, authorities confirmed that the Knights Templar cartel had essentially taken over iron ore exports from the western state of Michoacán, with the mineral trade with China becoming perhaps its largest source of income.
Cartels have also been accused of controlling production and manipulating domestic prices for crops such as avocados and limes.
And late last year, authorities in Michoacán confirmed that a 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.
The cartel’s system, dubbed “narcoantenas” by local media, involved internet antennas installed in several cities and built using stolen equipment.
The group charged about 5,000 people high 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 across the country.
In 2022, gangs burned down around two dozen stores in the central state of Guanajuato to protest attempts to arrest a cartel leader.
On Wednesday, President Andres Manuel Lopez Obrador -whose policy is to avoid confronting the cartels- showed the recommendations that the authorities made to Femsa in a meeting on Monday.
Those recommendations largely placed the onus on the company, calling for it to hire security guards in stores, install panic buttons and place cameras outside stores.
In 2009, police in the western state of Jalisco found at least four severed heads in Styrofoam coolers bearing the stores’ logos; the coolers were sold to store cold drinks, but it became a trend among gangs to use them to store decapitated heads.