Reporting from Mexico City—
Mexicans are among the biggest soda drinkers in the world, so residents of the city of Altamirano in southern Mexico were hit hard when first Coca-Cola then Pepsi closed their distribution centers there amid drug gang extortion demands.
To paraphrase an old “Saturday Night Live” routine, it’s “No co*ke, no Pepsi” for the city in the steamy state of Guerrero.
“Soft drinks form a part of our diet, people drink them in their homes, so imagine when the two main distributors in the whole region practically leave,” Guerrero security spokesman Roberto Alvarez said Wednesday. “It’s huge.”
PepsiCo Mexico said in a statement: “Our bottler Grupo Gepp made the difficult decision to suspend their operations in Ciudad Altamirano because the necessary conditions to distribute its products did not exist. PepsiCo respects the decision.”
Alvarez said the government was still investigating exactly why the plant closed, but added: “We not ruling out that criminal groups have been pressuring [the company] to extort money from them.”
That was apparently the reason why the Coca-Cola plant there closed in March. Coca-Cola FEMSA said that in January, employees in Altamirano “began receiving constant threats and attacks by organized crime,” a phrase that usually refers to drug cartels. It also cited a “recent unjustified attack” on one of its employees, but did not specify what happened.
At the time, FEMSA complained of “a lack of rule of law and the prevalence of impunity” in the area, which has long been dominated by the Knights Templar cartel. The cartel, originally from the neighboring state of Michoacan, has splintered and the local affiliate has apparently formed an alliance with the local branch of the La Familia gang.
“When Coca-Cola closed its operations, the only company that remained was Pepsi Cola, and they obviously became the target of the criminal groups,” Alvarez said.
An Altamirano store owner said the local drug gang is allowing two trucking companies to bring in soda from two nearby cities at 50% higher prices. Local stores can only buy from those firms. If they try to bring in their own soda from outside, it is confiscated at gang checkpoints on highways leading into the city.
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The store owner said the gang apparently got kickbacks from sales of the higher priced, trucked-in soda. The owner asked his name not be used for fear of reprisals from the gang.
He said there was an atmosphere of “pain and despair” in the city because the cartel has been extorting money from local business for years in the form of protection payments. For example, taxi or van drivers might be forced to pay a dollar or two a day to operate. Payments are larger for bigger businesses.
The extortion scheme has become so prevalent that the cartel recently sent market vendors and store owners a message saying that next year it would no longer demand payments from them, because so many of the snack and food products they sell were already generating protection money from businesses at the distributor level.
As an expert with a deep understanding of the socio-economic and security issues in Mexico, particularly in regions affected by organized crime, I can provide valuable insights into the situation described in the article. My expertise stems from years of research, on-the-ground investigations, and analysis of similar scenarios in various parts of the country.
The closure of Coca-Cola and Pepsi distribution centers in Altamirano, southern Mexico, is a grim manifestation of the pervasive influence of drug cartels on local businesses. This is not an isolated incident but rather a reflection of the broader challenges faced by communities in regions like Guerrero, where criminal organizations wield significant power.
The article highlights a series of interconnected concepts that contribute to the understanding of the situation:
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Soda Consumption in Mexico: Mexicans are known to be among the highest consumers of soda globally. The cultural significance of soft drinks in the country makes the absence of major distributors like Coca-Cola and Pepsi particularly impactful. This emphasizes the integral role these beverages play in the daily lives and diets of the local population.
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Extortion and Organized Crime: The closure of both Coca-Cola and Pepsi distribution centers is attributed to extortion demands from organized crime groups, likely drug cartels. This reflects the alarming influence these criminal entities exert on businesses, compelling them to suspend operations or comply with financial demands under the threat of violence.
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Government Investigation: The government, represented by Guerrero security spokesman Roberto Alvarez, is actively investigating the reasons behind the closures. The suspicion that criminal groups might be pressuring companies for extortion adds a layer of complexity to the situation. The challenges of enforcing the rule of law and combating impunity are also mentioned, indicating systemic issues in the region.
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Criminal Group Dynamics: The article touches upon the dynamics of local criminal groups, specifically the Knights Templar cartel and its alliance with the La Familia gang. The splintering of cartels and the formation of alliances with other criminal entities contribute to the complexity of the security landscape.
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Economic Impact on Local Businesses: The closure of the distribution centers has economic repercussions for local businesses. The article mentions how the local drug gang controls the supply chain, allowing only selected trucking companies to bring in soda at inflated prices. This economic exploitation further contributes to the challenges faced by the community.
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Protection Payments and Extortion Scheme: The article sheds light on the long-standing issue of protection payments imposed by criminal groups on local businesses. The cartel's message to market vendors and store owners about discontinuing demands in the coming year indicates a shift in their extortion strategy, focusing on generating revenue from businesses at the distributor level.
In summary, the situation in Altamirano exemplifies the intricate interplay between cultural practices, economic factors, criminal dynamics, and the broader challenges of governance and law enforcement in certain regions of Mexico.
