By Jacob L. Shapiro

In the early hours of March 23, 20 assailants rammed a truck into the main gate of a Coca-Cola Femsa distribution center in Mexico, hoping to breach the entrance and burn the center to the ground. Forces from Mexico’s National Gendarmerie intervened in time to prevent the facility, located in Ciudad Altamirano, from being destroyed, but 19 of the attackers still managed to escape. The attack was the second in three days against the distribution center, which had only just reopened on March 21 after a two-month closure due to extortion threats. Coca-Cola Femsa subsequently announced it would shut down its operations in Ciudad Altamirano indefinitely because of what it described as “the absence of law and order.”

Geographic Hurdles

Ciudad Altamirano is a small town on the border between Guerrero and Michoacan, two of Mexico’s most violent states. In 2017, Guerrero had one of the highest murder rates in Mexico. A mayor of a small town in the state was assassinated last December, and a candidate for mayor in another small town was gunned down a few days later. In November, Mexican soldiers were deployed in Guerrero to guarantee the safety of students and teachers at school, and in May, a vigilante force made up of 150 civilians was formed to protect homes from the same type of attacks Coca-Cola Femsa experienced last week. As for Michoacan, 1,200 Mexican soldiers deployed there a week ago to combat the Los Viagras cartel.

Some of the lawlessness in the region can be attributed to the fact that Guerrero state is outside of Mexico’s core. Ciudad Altamirano sits in a valley in the Sierra Madre del Sur, a mountain range between Mexico City and the Pacific coast. In fact, most of Guerrero state is mountainous. It takes roughly five hours to drive from Mexico City to Ciudad Altamirano, even though they are only 175 miles (280 kilometers) apart. The center of Mexico is a plateau, and anywhere outside that core region is hard to control, even a state like Guerrero, which borders Mexico City.

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But even considering the area’s problems with violence, underdevelopment and poverty (Guerrero has one of the lowest incomes per household in all of Mexico), the attack against the Coca-Cola Femsa distribution center is a disturbing omen. In the past, the border region between Guerrero and Michoacan was fought over by two cartels: Guerreros Unidos (a splinter group of the Beltran Leyva Organization) and La Familia Michoacana. But recently, two more cartels have joined the fight: the upstart Jalisco New Generation cartel and the remnants of the Knights Templar cartel, of which the Los Viagras cartel is a splinter.

These groups are battling over Ciudad Altamirano because controlling the town is a key part of controlling Guerrero and Michoacan. Ciudad Altamirano is on the Guerrero side of the border and stands on the Cutzamala River, which feeds into the 479-mile Rio Balsas, south-central Mexico’s dominant river. The town is also located at the intersection of two major highways, Federal Highway 51 and Federal Highway 134, making it an attractive location for companies like Coca-Cola Femsa. From Ciudad Altamirano, roads fan out in all directions. If one controls this intersection, it is a clear shot to Mexico City, the Pacific, or farther into Guerrero or Michoacan.

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Many businesses that operate in the parts of Mexico that are largely outside of government control have to make certain compromises to ensure their continued safety and prosperity. Coca-Cola Femsa’s decision to withdraw from Ciudad Altamirano demonstrates that the company no longer sees these compromises as cost effective – and it’s unlikely to be the last to make that decision. As for the cartels, this marks a change in behavior. The presence of large, profitable companies in their areas of control is generally beneficial. Just as a national government can tax citizens and businesses, cartels can and do levy “taxes” of their own to boost their revenue and assert their authority over the areas they control. Pushing a business out of the territory, as happened in Ciudad Altamirano, could therefore mean one of three things, none of which bodes well for the future: the cartels may be rich enough that bribes offered by companies aren’t attractive anymore; the company may have refused to pay up and therefore had to be made an example of; or the cartels have more ambitious plans, and the presence of a multinational company complicates those plans.

The Deeper Question

It is unclear at this point exactly who attacked Coca-Cola Femsa and why. But what is clear is that Coca-Cola Femsa believed its operations were so threatened that it could no longer safely (or profitably) do business in the region, despite the fact that Mexican police were able to thwart the most recent attack before much damage could be done. Ciudad Altamirano is a strategic spot for anyone seeking to dominate regional transportation routes, and multiple cartels are not only disrupting the already variable rule of law in this part of Mexico but are also battling each other in a conflict that appears to be getting bloodier every week. Some may say this is making a mountain out of a molehill – we are, after all, talking about just two small attacks in a region rife with violence – but the increasing violence throughout this region is getting harder to dismiss as business as usual.

The deeper question is why this is happening at all. We could blame it on geography: Guerrero is a mountainous region that’s poorly connected to the rest of the country. But this explanation is insufficient. The core territory of the United States is the Mississippi River, and if geography were perfectly determinative, Washington should have had (and should still have) great trouble asserting its writ past the Rocky Mountains. Say what you will about the differences between California and the East Coast, but the rule of law is consistent in both. Why, then, was the U.S. able to overcome its geographic challenges, while Mexico is still trapped by its?

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To be honest, I don’t yet have the answer, only the question. That is as good a place to start as any. In the meantime, a large multinational company is pulling out of south-central Mexico because competing cartels want to control that distribution network for their own purposes. And that means the next Mexican president, to be elected in July, will face a major test early in his or her presidency.