Supermarket chain forced to close all of its 191 stores and seven petrol stations due to ‘security risk’ – as gangs attack branches

In an extreme response to escalating cartel violence, Oxxo, Mexico’s largest convenience store chain, announced the closure of all of its 191 stores and seven gas stations in Nuevo Laredo, Tamaulipas.

This decision comes as Femsa, Oxxo’s parent company, deals with increased threats and demands from local gangs and drug cartels.

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The crisis between the company and the cartels reached a critical point when members of the cartel kidnapped two Oxxo employees.

After being kidnapped, the employees were forced by the cartel to act as lookouts and provide information to the gangs in the stores.

Cartels target convenience stores as strategic points to monitor police, military and rival gang movements, as they recognize the widespread use of these stores by the public.

In a statement released on Monday, Femsa confirmed that its stores in Nuevo Laredo would remain closed “due to acts of violence that put the safety of our colleagues at risk.”

“We have had incidents in stores that consisted of them (gangs) demanding that we give them certain information, and they even kidnapped two colleagues to enforce this demand,” Robert Campa, director of corporate affairs at Femsa, said in a statement.

This closure highlights a broader trend of cartel violence that affects not only small businesses in Mexico, but also large companies in the region.

Femsa, the largest soft drink bottler in Latin America and the largest Coca-Cola bottler by sales volume, is listed on the Mexican stock exchange.

The company’s decision to close all locations in the region shows the seriousness of the situation and the impact of the cartel’s influence in regions like Tamaulipas.

The area is known for being long dominated by the Northeast Cartel, an offshoot of the notorious Zetas Cartel.

The economic implications of this closure are significant, as cartels have already infiltrated several sectors of the country, including agriculture, fishing, mining and consumer goods.

Julio Almaza, head of the federation of business chambers in Tamaulipas, publicly denounced rampant extortion by cartels.

“We are hostages to extortion demands, we are hostages to criminal groups,” he exclaimed.

“Collecting extortion payments has practically become the national sport in Tamaulipas,” Almaza said in one of his last interviews.

Tragically, Almaza was shot dead outside his office in Matamoros, just hours after expressing his concerns.

The American Chamber of Commerce recently released a survey revealing that 12% of its members reported that organized crime has partial control over the sales, distribution and prices of their products.

This influence allows cartels to distort parts of Mexico’s economy, dictating who can sell products and at what price, often demanding a reduction in revenue.

Historically, cartels have used violent measures to assert their control over an area.

In 2014, the Knights Templar cartel dominated iron ore exports from the Mexican state of Michoacán, establishing a lucrative trade agreement with China.

The cartels also manipulated domestic prices for crops such as avocados and lemons, even creating makeshift Internet systems and charging locals exorbitant fees to use Wi-Fi, under constant threat of death if they refused.

“Collecting extortion payments has practically become the national sport in Tamaulipas”

Julio Almaza, head of the federation of business chambers of Tamaulipas

In 2022, cartels set several fires in about two dozen stores in the central state of Guanajuato following government attempts to arrest a cartel leader.

But despite the setbacks, Oxxo still has about 20,000 stores across the country.

Being a large company with such a large number of stores made the business a prime target for cartel violence.

In 2022, gangs burned down approximately two dozen Oxxo stores in Guanajuato in response to authorities’ attempt to arrest a cartel leader.

In a meeting with Femsa on Monday, President Andrés Manuel López Obrador, known for his policy of avoiding direct confrontation with cartels, presented recommendations to the company on how to move forward.

These suggestions included hiring security guards at stores, installing panic buttons and placing cameras outside stores.

But the gravity of the situation is emphasized by crazy incidents in the past.

For example, in 2009, Oxxo workers discovered several severed heads in Styrofoam coolers bearing the Oxxo logo in Jalisco – a horrific symbol of the cartel’s violent rule in the region.