The Mexican drug war is bringing an end to the distribution of Coke. I’m not talking about the powdery kind from South America, but instead, the sugary stuff first distilled in Atlanta, Georgia. Coca-Cola Femsa, which happens to be the world’s largest Coke bottler, bottling up much of that famous Mexican Coca-Cola, is suspending operations amid fears that it can’t keep its workers and facilities safe.
The move is far from an act of paranoia or over-the-top precaution. Apparently, the local state government had recently engaged in a high-stakes shootout near the plant. Local police forces were able to repel an attack in which at least 20 armed men tried to force their way into the Coca-Cola compound. Police later recovered a pickup truck and multiple Molotov cocktails. It’s likely that the armed assailants were planning to set fire to the facilities.
The assault was far from the first threat to the facility and its employees. Several workers had previously been threatened, and the facilities themselves came under attack. Likely, the attackers were trying to force Coca-Cola into providing protection money.
The Femsa Coca-Cola plant is jointly owned by Coca-Cola and Fomento Economico Mexicano and has been in operation for roughly 40 years. Following its closure, there are no other distribution centers in the Tierra Caliente region. It’s unclear if and when the bottler might be opened, but at least 160 workers will be directly affected by the closure.
(Credit: Coca-Cola FEMSA via Wikimedia Commons)
State and federal authorities had increased security in the area in an effort to protect Coca-Cola and others from violence. However, it proved to be too little, too late. While Tierra Caliente had once been spared the worst of Mexico’s drug war, the region has become increasingly violent as cartels fight for control of the heroin trade. Tierra Caliente offers excellent growing conditions for heroin, and in recent years drug cartels have begun to take over once local, peaceful growing operations.
The Femsa plant is not the first operation that Coca-Cola has shut down due to violence. In 2015, the company shuttered its Arcelia plant due to threats from organized crime groups. The Arcelia operations had previously been shut down in 2014 as well, due to threats from the La Familia Michoacana, which was trying to consolidate power in the area. Just last year, Coca-Cola halted operations in Chilpancingo for two weeks.
While Americans are most familiar with Mexican criminal cartels due to their drug smuggling, in recent years the organized criminal organizations have begun to branch out, finding new ways to make money. Each year, it’s estimated that the cartels steal upwards of $1 billion worth of fuel, for example, from the national oil company Pemex. Mexico has a considerable amount of oil wealth, and the cartels are working to siphon it off.
Extorting smaller firms and companies also generates a lot of cash. Quite frankly, Mexican mom & pop shops present far-easier targets than big companies more apt to pressure the police for protection. Weekly payments to cartel groups for “protection” are common.
Estimates of the total costs are hard to come by, but the economical impacts for local businesses are believed to be enormous. Profitable industries, such as avocado farming, are especially ripe for extortion. One group, the “Knights Templar,” is believed to have racked up as much as $150 million from extorting avocado farmers alone.
In total, the cartels are believed to generate at least $21 billion a year in revenues. To put that into context, Pemex is believed to generate roughly $51 billion a year in revenues.
