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No Coke, No Pepsi: Bottlers Leave Mexican City Hit By Crime

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Mexicans are among the biggest soda drinkers in the world, so residents of the southern city of Ciudad Altamirano were hit hard when first Coca-Cola then Pepsi closed their distribution centers amid drug gang extortion demands, reported Barchart (US).

To paraphrase an old Saturday Night Live routine, it's "No Coke, no Pepsi" for the city in the steamy southern 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 state 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 Ciudad 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.

A Ciudad Altamirano store owner said the local drug gang is allowing two trucking companies to bring in soda from two nearby cities at 50 percent 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.

The store owner said the gang apparently got some of the excess profit from selling the 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 paying protection money at the distributor level.

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Coca-Cola Femsa has closed its distribution center in the Tierra Caliente region of Guerrero due to insecurity following months of threats and aggression against its employees, reported Mexico News Daily.

There were two armed attacks this week on the facility in Ciudad Altamirano.

In a statement released yesterday, the company said that the decision to shut down indefinitely its operations in the city, effective yesterday, is “consistent with the fundamental objective of preserving the security and safety of its [160] employees.”

“The current lack of the necessary conditions to efficiently and safely operate within this part of the state of Guerrero, as exemplified by the recent unjustified assault on one of our employees, led the company to make this decision,” the statement explained.

At about 3:00am yesterday, a truck transporting a group of 20 armed men crashed into the main gate of the plant.

According to state security officials, the men intended to set the distribution center on fire but Federal Police officers managed to foil the attack. However, when they arrived at the scene the armed men shot at the National Gendarmerie personnel and a confrontation ensued.

One of the aggressors was arrested but the others managed to escape, leaving behind a pickup truck, a firearm, bullet casings and plastic containers filled with gasoline, the Guerrero Coordination Group (GCG) said.

Two days earlier, the distribution center was targeted in another attack.

In that incident, armed men shot at company employees who were reopening the plant’s sales section, which had been closed since January due to extortion threats. One Coca-Cola worker was seriously wounded in the assault.

In yesterday’s statement, the company said that since the start of the year “its employees at its distribution center in Ciudad Altamirano have received constant threats and acts of aggression from organized crime.”

Shutting down operations due to violence against Coca-Cola in Guerrero, one of Mexico’s most violent states, is not unprecedented.

In August 2014, the bottler temporarily ceased operations in the municipality of Arcelia, located 50 kilometers east of Ciudad Altamirano, after four of its delivery trucks were torched during a dispute between the criminal organizations La Familia Michoacana and Guerreros Unidos.

In February 2015, it shut down its storage facility in the state capital Chilpancingo for two weeks after a company manager and assistant manager were abducted and held hostage by students from the Ayotzinapa Rural Teachers’ College.

At the time, the students said that setting the employees free was conditional on the release of two of their fellow students who had been detained by police for looting a Coca-Cola delivery truck.

The students attended the same school as 43 students who disappeared in Iguala, Guerrero, six months prior to the kidnapping in September 2014.

In June 2015, the company once again shuttered its operations in Arcelia because of constant threats from organized crime.

Yesterday’s decision by the world’s largest Coke bottler brings an end to more than four decades of operations in the Tierra Caliente region of Guerrero, an area plagued by violent cartel crime.

Last weekend, the army sent in more than 1,200 troops to the same region in Michoacán.

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