HomeNewsBriefInsecurity Leads Mexico Convenience Store Chain to Close Stores
BRIEF

Insecurity Leads Mexico Convenience Store Chain to Close Stores

EXTORTION / 6 JUL 2017 BY PARKER ASMANN EN

Mexico's largest convenience store chain says it has been forced to close a number of stores amid growing insecurity and violence, a reflection of the economic impacts of the increasing violence gripping the country.

Oxxo, Mexico's largest convenience store chain with over 15,000 locations across Latin America, announced that the company was forced to close all of its stores in the city of Apatzingán in the western state of Michoacán due to growing insecurity after several violent incidents, Proceso reported.

The spate of violence that appears to have spurred the decision began on June 30 when two of the chain's stores were burned down, suffering a near total loss, according to Proceso. Two more Oxxo stores were burned down in broad daylight on July 1.

SEE ALSO: Mexico News and Profiles

Violent incidents continued to occur in the following days. Armed individuals aboard motorcycles reportedly burned one Oxxo store's products before moving onto another one of the chain's stores near by, throwing Molotov cocktails, and causing damages to the store's entrance, according to Proceso.

Authorities reportedly have been unable to identify those responsible.

Oxxo has yet to release an official statement on the closures, and the company did not respond to repeated requests for comment from InSight Crime. 

InSight Crime Analysis

This is not the first time that Mexico, and the state of Michoacán in particular, have felt the economic effects of growing insecurity and violence. Violence cost Mexico an estimated 18 percent of the country's gross domestic product in 2016, equivalent to about 3.07 trillion pesos (around $167 billion), according to the 2017 Mexico Peace Index. In Michocán, the report found the per capita economic impact of violence to be 25,600 pesos (around $1,400) per person, ranking it somewhere in the middle of Mexico's 32 states.

SEE ALSO: Coverage of Extortion

Agricultural producers in Michoacán have felt this impact first hand. In 2013, one academic estimated that the extortion of agricultural producers at the hands of organized crime groups caused the prices of staple foods to increase 25 percent. And in the cities of Guadalajara and Monterrey, the cost of limes jumped from 8 pesos to 40 pesos (from around $0.40 to more than $2) due to extortion.

The closure of the Oxxo stores is a stark example of how ongoing insecurity in Michoacán and in Mexico more generally will continue to have negative economic impacts that could exacerbate some of the socioeconomic issues that contribute to the country's crime problems. 

 

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