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Dairy company Lala has a reduced presence in the south of Tamaulipas. Dairy company Lala has a reduced presence in the south of Tamaulipas.

Dairy company joins Coca-Cola, closes distribution center over insecurity

Grupo Lala has ceased operations in Ciudad Mante, Tamaulipas

Heightened insecurity has forced some businesses to shut down their operations in the states of Tamaulipas and Guerrero.

Dairy company Grupo Lala said this week that due to widespread insecurity and violence in Ciudad Mante, Tamaulipas, it had temporarily shut down its distribution center earlier this month.

At least one of its delivery trucks was set on fire.

Lala said it was working with local authorities “in order to resume activities as soon as possible.”

Local news sources have reported that Domino’s Pizza, PepsiCo, dairy producer Sello Rojo and the furniture store Foly Mueble, have also shut down their operations in that region, located at the very southern end of the state.

They join Coca-Cola Femsa, which closed its distribution center in Ciudad Altamirano, Guerrero, “indefinitely” on March 23 for security reasons.

“More than the financial impact, what was regrettable for Coca-Cola Femsa was having to lay off more than 160 workers in order to procure their safety and that of their families . . .” said the company in a statement.

It also said that each month the Altamirano facility remains closed the company loses about 30 million pesos (US $1.5 million).

Another corporate victim of insecurity has been chain drug stores, according to the newspaper El Economista.

Nationwide drug store chain Farmacias del Ahorro said there are several areas in the country it cannot access, such as the north of Tamaulipas, due to violence.

Stores in Jalisco, Guerrero and Michoacán have begun operating under a curfew, while a medications distribution firm has been the victim of four robberies so far this year between México state and Veracruz.

The same company, Levic, stopped delivering in parts of Tamaulipas after several of its personnel were kidnapped.

It’s not going to get any better in the opinion of a specialist interviewed by El Economista.

“I would not be surprised if more businesses [such as Lala and Coca-Cola Femsa] have to make a similar decision, because what we’ve been seeing in recent months is a deterioration in security,” said Antonio Ocaranza Fernández of the consulting firm Oca Reputación.

Authorities seem to be concerned about doing anything before the elections, he said.

Ocaranza thinks it will be businesses that rely on the transportation and shipment of goods that will suffer the most.

He hopes that the cases of Lala and Coca-Cola will serve as a wake-up call for authorities to pay heed and act.

“Both companies are Mexican, but the moment when an international firm has to make a similar decision the issue of investing in Mexico is going to be questioned, because it is a place where the rule of law is not enforced.”

Source: El Economista (sp), Forbes México (sp)

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