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BusinessInternationalNewsTrucking

Borderlands: Appetite for avocados stirs gang violence in Mexico; Corona beer to be brewed in China

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Appetite for avocados is fueling violence in Mexico; Hyundai picks Claudia Marquez as CEO in Mexico; Arconic closes Texas aluminum plant; and Corona beer to be brewed in China.

Appetite for avocados stirs gang violence in Mexico

In the Mexican city of Uruapan, an avocado producer was recently shot to death in his car as he drove home.

The shooting, which occurred on October 25, was caught on video and widely circulated on social media.

Mexican authorities in Uruapan believe the man was executed by a sicario, a hitman for drug cartels, who try to extort farmers for protection money, according to La Opinion.

Uruapan, in the state of Michoacán, is the heartland of world production for avocados. The region accounts for 92% of Mexico’s avocado exports. 

The region’s avocado boom has been fueled by soaring U.S. consumption, as well as a growing demand from Canada, France and Japan.

Mexico exported $2.4 billion in avocados in 2018. More than 80% of avocados consumed in the U.S. – over 2 billion pounds annually – are imported from Mexico.

The majority of avocados consumed in the U.S. from Mexico are transported from Michoacán to the Texas border cities of Laredo and Pharr, around 680 miles north.

The enormous profits has attracted gangs, such as the Jalisco New Generation Cartel, La Familia Michoacana, the Viagras and the Knights Templar.

The gangs have been extorting money from avocado producers, hijacking trucks exporting avocados, or attempting to take over corridors used by trucks.

Avocado producers lose an average of four truckloads per day to organized crime – around 12 tons (26,448 pounds) – during the journey on the highways from the orchards to the packing zones, according to the Association of Export Producers and Packers of Avocado from Mexico. 

On August 8, Mexican authorities found the bodies of seven men and two women hanging from a bridge in Uruapan. Police also found 10 more dismembered bodies – seven men and two women – in what authorities believe was a gang feud, according to Mexico Daily News.

Seven police officers from the municipality of Ziracuaretiro, Michoacán, were arrested on September 26 for their alleged involvement in the forced disappearance of two avocado farmers.

On October 15, 13 Michoacán police officers were killed when they were ambushed as they traveled to the Mexican municipality of Aguililla to carry out a court order, authorities reported.

 U.S. Department of Agriculture inspectors – who in were in Michoacán to inspect avocados – also were threatened by a gang at gunpoint in August.

The incident prompted the USDA to write a letter to Mexican authorities, “For future situations that result in a security breach, or demonstrate an imminent physical threat to the well-being of APHIS personnel, we will immediately suspend program activities.”

Michoacán Attorney General Adrián López Solís has said the violence is linked to gangs fighting for a slice of the avocado trade, as well as controlling the corridor that leads to the nearby international seaport of Lazaro Cardenas, according to the BBC.

In some cases, avocado farmers in Mexico are taking up arms to protect their crops.

“If it wasn’t for avocados, I would have to leave to find work, maybe go to the United States or somewhere else,” Pedro de la Guante, told the Associated Press.

It is not clear what affect the gang violence could have on retail prices, if any at all. The average national price of a Hass avocado was $1.13 on November 1, down from $2.10 on July 5, according to the USDA’s weekly retail price report.

Aaron Acosta, with Villita Avocados in Pharr, Texas, said producers switched over to the Aventajada avocado crop on October 21.

“It’s going well, we have been noticing a slight uptick in orders and retailers open to promoting avocados again,” Acosta told FreightWaves.

Hyundai picks Claudia Marquez as chief executive in Mexico

Korean car and commercial truck manufacturer Hyundai has named Claudia Marquez as its new chief executive (manager) in Mexico effective November 1.

Claudia Marquez

Marquez joins Hyundai with more than 24 years of global automotive experience. She previously held leadership positions at Nissan Motor Co. and BMW Group.

In her new role at Hyundai, Marquez will be responsible for managing all aspects of the company’s business in Mexico, including product sales, marketing, customer relations and distributor development strategy.

Marquez will report directly to José Munoz, chief executive of Hyundai Motor North America and global chief operating officer of Hyundai Motor Co.

San Antonio industrial aluminum manufacturer shutters facility

Arconic, a manufacturing company that supplies aluminum sheets for industrial use, announced it will lay off 65 employees at its rolled products plant, effective December 20, according to a notice filed with the Texas Workplace Commission.

New York-based Arconic is one of North America’s largest aluminum suppliers. Arconic’s aluminum is used by carmakers in the U.S. auto industry. The company has 27 plants around the world, including three in Mexico.

Arconic spokeswoman Gliozzi Tracie said in a written statement, “As part of Arconic’s continued drive to streamline its business portfolio, the company has made the decision to idle its mill in San Antonio by the end of 2019,” according to the San Antonio Express-News.

Mexico’s iconic Corona beer to be brewed in China 

Corona beer is now being produced outside of Mexico for the first time in the company’s 94-year history.

Anheuser-Busch InBev (A-B InBev), which owns Corona’s parent company Grupo Modelo, recently announced it has decided to produce Corona in other plants around the world due to increased global demand.

The company recently began brewing Corona in China, which has become a major market.  

Corona recently began brewing its beer at plants outside of Mexico. Courtesy photo

Carlos Brito, chief executive of A-B InBev, said in a conference call with analysts that the production capacity of Corona beer in Mexico is no longer sufficient to meet the growing global demand for the beer.

“Corona, our most premium global brand, continued to offer very solid results with 21.1% revenue growth outside of Mexico [in the third quarter of 2019],” Brito said, according to Forbes. “The brand continues to grow with strong double digits, with solid results from South Africa and Western Europe as well.”

Brito added that in every brewery where Corona is produced, they have a Mexican brewmaster who oversees the process.

“We take care that you have the same manufacturing process, the same raw materials and continue with the same legacy of the brand,” Brito said.

A-B InBev holds the domestic and international license for the brand, with Constellation Brands owning Corona in the United States. All Corona beer shipped throughout Mexico, Canada and the U.S., are brewed in the northern Mexican cities of Nava and Obregon.

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Noi Mahoney

Noi Mahoney is the Cross-Border Freight Market Reporter for FreightWaves.com. He graduated from the University of Texas at Austin with a degree in English in 1999. Mahoney has more than 20 years experience as a reporter and editor. He has worked for newspapers in Florida, Maryland and Texas.

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