A mass of convenience stores in a Mexican border town have been reopened following a brief closure due to gang activity and safety concerns, providing a glimpse into the ongoing drug cartel conflicts across the Rio Grande.
Affecting Big Business
Drug cartels and gang activity are becoming so widespread that it is affecting Mexico’s biggest businesses and corporations, including its largest convenience store chain Oxxo.
191 Stores Shut Down
Late last month Femsa Corporation, the parent company of the Oxxo convenience chain, shut down all 191 of its convenience stores, including seven affiliated gas stations in Nuevo Laredo due to cartel activity.
Across the Border
Nuevo Laredo is a border town in the state of Tamaulipas, with a population of almost 400,000. It is situated on the banks of the Rio Grande, just across the river from Laredo, Texas.
Cartel Control
The Northeast Cartel has exercised power and control over the city and surrounding areas for decades, but now their activities – and the activities of drug cartels across Mexico – are affecting the country’s major industries and business sectors.
Business Leader Assassinated
Femsa chose to close the convenience stores following the assassination of a major business leader in Tamaulipas named Julio Almanza.
Speaking Out
Almanza, the head of the state business chamber’s federation, appeared on state television publicly complaining about extortion from drug cartels in the state before his death.
“Hostages to Extortion”
“We are hostages to extortion demands, we are hostages of criminal groups,” he said in one televised interview. “Charging extortion payments has practically become the national sport in Tamaulipas.”
A Swift Reaction
A day later Almanza was shot in Matamoros, a city just across the border from Brownsville, Texas. The cartel assassination led to a swift reaction from the Femsa corporation.
Strategic Stores
According to a report from the Associated Press and testimony from a company spokesperson, cartel gangs have been using Oxxo convenience stores as a means to track police and rival gang members.
Threats and Kidnapping
This has apparently led to threats and even the kidnapping of employees. “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,” said Femsa corporate affairs director Robert Campa.
Safety Risks
Femsa closed all of its stores temporarily out of an abundance of caution, citing safety risks to employees in an official statement.
Agreement With Police
Just a week later the company announced plans to reopen all 191 stores in Nuevo Laredo. It then confirmed that it had reached a compromise with local police.
More Police Presence
The company confirmed that state and city police have boosted their presence in areas where Oxxo convenience stores are located, as well as applying more police patrols around the 191 stores.
Panic Buttons Installed
All Oxxo stores in Nuevo Laredo now have panic buttons installed behind counters, allowing employees to silently call police if they are threatened or intimidated by gang members.
100 Soldiers Deployed
According to Jorge Cuéllar Montoya, a spokesperson for the state’s public security ministry, 100 soldiers of the national army were deployed to Nuevo Laredo late last month.
Special Forces Corps Called
A statement from the National Defense Ministry also confirmed that the army’s elite Special Forces Corps would be used to carry out accelerated security measures in the city.
20,000 Stores Nationwide
Despite its struggles in some regions of Mexico, Oxxo is still expanding as a convenience store brand. It currently operates some 20,000 stores across the country.
Expanding to the USA
Femsa has also reached an agreement with Tennessee energy company Delek U.S. Holdings to buy out 249 food marts across Texas and New Mexico, signaling its entry into the US market.
A “Long-Held Ambition”
“At FEMSA, we have a long-held ambition to enter the U.S. convenience and mobility industry, and this transaction represents the ideal way for us to take our first step in this compelling market,” FEMSA retail operations CEO Jose Antonio Fernández Garza-Lagüera told Border Report.
Regulatory Approval Pending
The $385 million deal is still pending approval from US regulatory authorities, and a conclusion is expected in the latter half of the year.
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