Mexico: Opposition Nix Energy Privatization

[Joanne98]

Mexico: Opposition Nix Energy Privatization

Mexico, Jan 27 (Prensa Latina) Mexican opposition leader Andres Manuel Lopez Obrador promissed to fight attempts to privatize energy and imposition of value added taxes on food or medicines.

Lopez Obrador strategy consists of informing all opposition action and keep President Felope Calderon and the oligarchy at bay by strengthening a network within the opposition.

He also invited the people to sign a letter that approves his leadership of the opposition and peaceful resistance against those who attack national patrimony, electricity and oil industries.

The opposition leader convened a national march on Jan 31 to protest price hike on staple shopping basket involving union, civilian and social organizations.

He termed the march sole way to induce a change in federal economic policy, stopping price increase of tortilla, gas and cooking gas.

http://www.plenglish.com/article.asp?ID={92235D12-A768-4905-B285-A6C7B8E718CE}&language=EN

[Judi Lynn]

1. If the opposition doesn't do something quickly, they will go straight to hell!

Look at the situation which confronts them every single day:

from the January 23, 2007 edition

Calderón's challenge: Confronting monopolies
A steep rise in tortilla prices could force Mexico's new president to try to loosen big business's tight grip on the economy. Part 2 of three.
By Sara Miller Llana | Staff writer of The Christian Science Monitor

MEXICO CITY - Mexicans run into near-monopolies at every turn. When they pick up a phone (to be charged rates above the international average), it's almost certain that the service provider is Telmex, which owns 94 percent of landlines. When they turn on the TV at night, they're probably viewing a channel owned by one of two dominant broadcasters.

Usually, they just sigh.

But this month, the price of corn tortillas, dominated by a company owning 70 percent of the tortilla and cornmeal market, shot up by more than 50 percent in some parts of the country. That sent the war against price gouging, usually reserved to regulatory agency meetings, pouring into the streets – with housewives marching to demand an answer.
(snip)

For President Felipe Calderón, though, the "tortilla wars" could ultimately portend something much larger. He campaigned as the "jobs president," but if history is to grant him that title, he faces tough economic reforms ahead. Economists say loosening the tight grip that business elites have on the economy should be near the top of the list for a country that is losing position globally – in no small part because of the economic concentration that keeps competition down and prices high.

"Monopolies are one of the top three reasons that Mexico is not growing faster," says Luis Felipe Lopez-Calva, who is joining the UN as the chief economist for Latin America and the Caribbean. He's one author of a recent World Bank study showing that Mexican oligopolies such as Telmex, public monopolies such as oil company Pemex, and the nation's powerful public-sector unions hurt competitiveness and exacerbate the divide between rich and poor. Under the administration of former president Vicente Fox, it showed, billionaires got richer – their net worth growing steadily in recent years to 6 percent of GDP in 2006 – while nearly half of Mexico's 106 million residents continued to live in poverty.
(snip/...)

http://www.csmonitor.com/2007/0123/p12s01-woam.html

[Joanne98]

2. One company owns 70% of the cornmeal market? Which one?

Sounds like a monopoly..

[Judi Lynn]

4. It's the Gruma company. This is also mentioned in an article in the Economist:

Mexico's economy
Jan 19th 2007
From the Economist Intelligence Unit ViewsWire

Monopolies and tortillas

~snip~
The government also ordered the Federal Competition Commission (Comisión Federal de Competencia, or CFC), the nation’s anti-trust authority, to initiate an investigation into anti-competitive actions by the few large corn and tortilla companies that dominate the industry. One company alone, Gruma, controls 70% of the tortilla and cornmeal market. Mexico’s consumer protection agency (Procuraduría Federal del Consumidor, or Profeco), is also monitoring distributors for signs of price fixing. Companies found to be engaged in price manipulation or other practices (such as restriction of production and distribution, or market division) could be fined as much as US$6.4m, according to the CFC.
(snip)

http://www.economist.com/daily/news/displayStory.cfm?story_id=8575130&fsrc=RSS

~~~~~~~~~~~~~~~~~~~~
It's in the U.S., as well!

The ratings are supported by Gruma's solid business profile as one of the leading producers of corn flour and tortillas in the U.S., and of corn flour in Mexico, Central America and Venezuela. Gruma's competitive advantages include strong brand equity, broad distribution systems, proprietary technology, wide geographic coverage, economies of scale and diversified product lines.

The ratings are also supported by the geographic diversification of revenues and cash flows, with 56% of EBITDA earned from US operations in 2003, 23% from Mexico, 19% from Venezuela and 2% from Central America. Gruma generates hard currency cash flows from operations in the U.S. With sales of US$1 billion in 2003, the US subsidiary Gruma Corporation is the company's most important contributor to revenues and EBITDA. Gruma Corporation is one of the largest producers of corn flour and packaged tortillas in the U.S. The US market is profitable and high growth. Demand for Mexican-style food items has been growing rapidly due to increasing Hispanic population and growing popularity of Mexican-style food among non-Hispanics. Gruma is planning to expand sales in the US through broader national coverage in production and distribution.

In Mexico, Gruma's 83% owned subsidiary, Gimsa, is the leading corn flour producer with a market share of 71% in 2003. Gimsa's core strategy for growth is encouraging conversion from the traditional method of tortilla production to the dry corn flour method pioneered by the company. The company estimates that Gimsa's ready-mix corn flour, sold under the brand MASECA, is used in only 35% of the tortillas that are consumed in Mexico while most of the remaining tortillas are produced under a traditional method that is less efficient in production time and in the use of energy, water and labor.
(snip)

In recent years, capital expenditures have been moderate and have been financed with internally generated cash flow. Over the next several years, the company is planning capacity expansions at Gruma Corporation that will allow further market penetration in the East Coast and the Great Lakes region, where its presence is weaker than in Western and Southwestern US. Gruma is also targeting growth in Europe, where it owns a plant in England and recently acquired a corn flour plant and a tortilla plant in Italy and Holland respectively. Annual capital expenditures over the next several years will average US$120 million. Fitch Ratings estimates that 2004 EBITDA will reach close to US$280 million and continue to grow thereafter. Therefore, the company should comfortably fund these investments with internal cash flow.

Gruma is the world's largest producer of corn flour and tortilla. The company has operations in Mexico, the U.S., Europe, Venezuela and Central America. Gruma also produces and sells wheat flour in Mexico and in Venezuela. In 2003, Gruma had revenues of US$2.1 billion and EBITDA of US$247 million.
(snip/...)

http://www.globalmanufacture.net/home/news/gruma.cfm

~~~~~~~~~~~~~~~~

This is getting ridiculous! There's more. Gruma also does business as "Mission Foods.":

~snip~
...Mission Foods, a Division of Gruma Corporation, a privately
held company headquartered in Los Angeles, California.
(snip)

http://sec.edgar-online.com/1998/06/29/14/0000950134-98-005579/Section14.asp

More:

CHS sells Mexican foods operations
CHS Inc. recently sold its tortilla and chip operations to Gruma Corporation. The sale consists of three plants, located in New Brighton, Minn., Fort Worth, Texas, and Phoenix, Ariz. The plants employ about 250 employees. Gruma is a subsidiary of Gruma SA de C.V., of Monterrey, Mexico, which markets products under the Mission and Guerrero names.(snip)

http://www.rurdev.usda.gov/rbs/pub/jul05/newsline.htm

Gruma's website:
http://www.gruma.com/vIng/relacion/relacion_informacion.asp?idEmpresa=1

Good lord!
Company profile, at Yahoo:
http://biz.yahoo.com/ic/113/113985.html

This is a foreign language to me. I wish I knew how to find out who the Americans are who are involved in this company.
I never took the time to study financial things. Don't know where to start looking.

These guys have a choke-hold on the market, don't they?

[Joanne98]

5. Thanx. I didn't see that!

[Judi Lynn]

6. It wasn't mentioned by name in your article. I did a search to find it.

I've seen those "Mission" tortillas in my own grocery store for ages.

You can be sure I'm never going to buy any, not ever. Don't want to encourage these guys.

I hope to learn more about the Gruma company, over time. They've got some nerve trying to gouge a country's poor people through the price of their products.

[w4rma]

3. A lot of money and power at stake. That's why Calderón stole the election. (nt)

[Peace Patriot]

8. "...powerful public-sector unions..."? Like the teachers getting their heads

bashed in, in Oaxaca?

Luis Felipe Lopez-Calva wants to make PUBLIC-SECTOR salaries "competitive"? "Competitive" with what--$2/hour sweatshop workers? Sounds like Schwarzenegger and the nurses' and teachers' union to me. All that money, currently distributed throughout the population, among teachers, nurses, fire and rescue workers, police and other public servants, needs somehow to get into the pockets of the rich, in order to be "competitive"?!

I don't buy it. We know the Bush fascists are looting government pensions to pay for their heinous war--so the rich don't have to pay for it. This sounds suspiciously similar to the assault on public employees--quite directly with torture, rape and death, in Oaxaca, and indirectly by a thousand cuts for others--that is characteristic of Bushite fascists. Bust the corporate predator monopolies, absolutely. No "businesses" ever deserved it more. Not since the "Robber Barons" of the nineteenth century have there been such oppressive, monstrous "business" conglomerates looting ordinary people in every way. But leave the teachers and other public servants alone! And God bless their unions! If it weren't for "public sector" unions, there were be hardly any advocacy for labor rights at all! And public service would further deteriorate in quality, with the poor having NO SERVICES.

[oldlady]

7. I don't pretend to be an expert

on Mexican current events. But, I recently returned from time in Mexico City and villages in Michoacan. Everywhere (urban & rural) I saw Obrador billboards and handpainted signs. Never saw one for Calderon. HOWEVER, my hosts told me the "right man won" because Obrador was all for a welfare state and paying people who wouldn't work...I was a little dumbfounded. Weird to hear the welfare-queen rhetoric alive and well in Mexico City.

[Peace Patriot]

9. They sound like the uninformed, heavily propagandized folks right here at

DU, who parrot the war profiteering corporate news monopoly line that Hugo Chavez is "increasingly dictatorial," although they can never come up with any evidence that it is true. You challenge them with the facts, and they fall back on their "feeling" about him--and they never realize where that "feeling" comes from. Plain brainwashing. (--that is, if they aren't being paid to tout this line at DU, which I sometimes suspect). Phrases like "welfare state" and "paying people who won't work" are pure corporatist propaganda. The fat cats get paid not to work--all the time. Millions of dollars to CEOs for belonging to the right country club--and for LAYING OFF workers, and squeezing every last bit of profit for the rich out of every enterprise. It's easy--you lay off workers, and loot their pension funds. Lot of work, that. Then there is the entire lazy-butt coupon-clipping class--big homes, multiple homes, expensive vacations--not a day of work. They rip off OTHER peoples' work.

This lying, deceitful, corporate "meme" that "welfare" makes people lazy--when people are earning $2/hour, trying to feed six family members and can't afford tortillas (let alone medical care and education)--makes me sick. It is such a goddamned falsehood! But I do feel SOME bit of compassion for the propagandized. I know how hard it is to break free from the corporate news monopoly brainwashing. I have always thought that I was a well-informed person, but I only just learned RECENTLY about the TWO HUNDRED THOUSAND Mayan Indians who were slaughtered in Guatemala during the '80s, with Reagan's direct complicity. I knew something had happened there--leftists and peasants killed--but, at the time that this was occurring, only two countries away from me, I had no idea of the scale of it. It was a BLACK HOLE in the corporate "news." And if you don't grasp the magnitude of a thing like that--or, for most people, don't hear about it AT ALL--it colors your perceptions. For instance, you might think that Reagan was just a harmless old fuddy-duddy who got hoodwinked by Ollie North and Co. It would skew your perception of everything else that Reagan did--to have this deliberately created hole in your knowledge. And it's HARD to fill those holes--very hard--almost impossible for ordinary people to get a real picture of U.S. foreign policy, with so much disinformation hammered into you, day and night. And they have a much similar corporate press in Mexico. And I imagine that the middle class in Mexico feel quite proud of their TVs, and feel "plugged in" to the great, consumerist, "free trade," post-modern world, through the corporate "news" monopolies.

The middle class that has benefited from neo-liberalism in Mexico will change their tune when the fascists turn against THEM--as is happening in the U.S., with massive job losses, and the increasing inability of the middle class to pay its medical and education bills. It's only a matter of time. Some are flying high on the booty from "free trade." It cannot and will not last. And when it reaches the point where THEY can't afford tortillas, things will change. They also don't have the Iraq War and Bush, to educate them about the Corporate Rulers (--although Gov. Uribe in Oaxaca is doing a pretty good job of showing the bared teeth of these predators). Anyway, I would say, have some compassion for the disinformed. And take a look at the so-called "red states" of "Middle America." A jobless wilderness. A landscape of ghost towns. A coming dust bowl. Fucked by the Bush Junta.

[oldlady]

10. wow, very well said

The first purchase I made in Mexico was from Oaxaca organizers-- a wanted poster of *

I wouldn't necessarily consider the folks I stayed with middle class. They certainly aren't benefitting from any policies of their government. Let's just say they make frequent trips to Western Union. It was good for me to see that political thinking is equally muddled anywhere you go. I don't think they really look into things, you know? I never saw a newspaper in the house and the only televison I ever saw them watch was The Simpsons (in Spanish). No books, no internet, no radio-- just bootleg CDs.

I speak nearly nada Spanish, but my traveling companion was fluent. So, I spent days and days not understanding what was being discussed. However, I did understand "Hugo Chavez" and it was clear that he was much admired.

[gorbal]

12. It is hard to stop yourself from beliving it

I was starting to be swayed when I remebered this site-
http://www.venezuelanalysis.com/

I trust this site because I have read critisism as well as support of Chavez.

[pescao]

11. demo today against calderon in london

http://www.indymedia.org.uk/en/2007/01/360998.html

...

Campaigners then joined a picket outside the Foreign Office called by the Mexico Support Group to protest against that country's "illegitimate" president, who was in London to meet with government leaders.

Chanting "Blair, Brown and Beckett - don't entertain a dictator" and "Oaxacan blood on Calderon's hands," protesters denounced the visit as a "cheap publicity stunt designed to whitewash Calderon's image internationally."

Spokesman Carlos Gonzalez Esquivel explained: "Calderon is a fraudulent and illegitimate president who stole last July's election, officially winning with less the one per cent of the vote.

"There were hundreds of reported irregularities, including ballot-stuffing, vote-dumping and the illegal intervention of former President Fox, elite businessmen and the Catholic church."

Since taking power, Calderon has "viciously crushed" the rebellious social movement in the southern state of Oaxaca, with paramilitary police killing 20 people and imprisoning hundreds more.

National and international human rights groups have reported torture, abuse and rape.

"He's even ratcheted up the price of tortillas, cutting a deal with Wal-Mart so that they can corner the market of this most traditional and basic Mexican food," Mr Gonzalez Esquivel added.

...



more pix at http://protestphoto.livejournal.com/12341.html