| ID | 06MEXICO6413 |
| SUBJECT | WHO ARE MEXICO’S MONOPOLISTS? |
| DATE | 2006-11-09 16:04:00 |
| CLASSIFICATION | UNCLASSIFIED//FOR OFFICIAL USE ONLY |
| ORIGIN | Embassy Mexico |
| TEXT | 85174 2006-11-09 16:22:00 06MEXICO6413 Embassy Mexico UNCLASSIFIED//FOR OFFICIAL USE ONLY VZCZCXRO4906 UNCLAS SECTION 01 OF 03 MEXICO 006413 SIPDIS SENSITIVE, SIPDIS FOR WHA/MEX, WHA/EPSC, AND EB/IFD/OMA E.O. 12958: N/A ——- ¶1. (SBU) Bank of Mexico and likely incoming Mexican government officials in recent weeks have stressed the importance of opening key sectors of the economy to more competition, but have been hesitant to publicly name the “offending” companies. This telegram spells out which sectors are dominated by only a few powerful firms, who is in charge of these companies, and how much of the market the companies control. End Summary. ——————————————— —– ¶2. (SBU) At the Monterrey Business Summit on October 30, 2006, Bank of Mexico (BOM) Governor Guillermo Ortiz and other participants (business representatives, academics, President-elect Felipe Calderon transition team members, etc.) underscored the importance of more competition in key sectors such as telecommunications, transportation, construction, and financial services. Ortiz stressed that macroeconomic and financial stability is an important “theme” in the Mexican economy, one that has been largely achieved. He said that another key theme is competition. He emphasized the importance of focusing on monopolies and how they hinder economic growth and competition by keeping prices high. Professor and political commentator Denise Dresser made similar points at the Summit the day before, and received applause for her comments. Numerous participants focused on the need to challenge monopolies and the excessive costs they produce. That said, no one at the Business Summit would name specific companies or people (Carlos Slim, etc.). When pressed by a questioner to name a Mexican company that needs to open up to competition, Mexican Institute for Competitiveness head Roberto Newell would only name Coca Cola and Wal-Mart, to the nervous laughter of the audience. ¶3. (SBU) To facilitate USG understanding of what analysts are referring to when they talk about Mexican industries and sectors where competition is absent or severely restricted, Post is providing the following list (alphabetical listing by sector). Airlines Aeromexico Mexicana (Note: The introduction of low-cost airlines is expected to increase competition in the domestic market. End Note.) Beer Grupo Modelo Cerveceria Cuauhtemoc Moctezuma Bottling Coca-Cola FEMSA Pepsico MEXICO 00006413 002 OF 003 CEO and DG: Oscar Cazares Bread Bimbo Broadcasting Televisa TV Azteca Cablevision (owned by Televisa) Sky (owned by Televisa) Cement Cemex HOLCIM Apasco Energy Pemex Federal Electricity Comisisn (CFE) Luz y Fuerza del Centro (LyFC) Financial Services BBVA Bancomer (Spain), Banamex Citigroup (U.S.), Santander (Note: Mexico’s Federal Competition Commission is investigating banks and pension fund operators to see why their commissions are so high, and if they are involved in anti-competitive practices. The results of this investigation are supposed to be released around March ¶2007. A number of companies, including Wal-Mart, have filed for licenses to enter the financial services market in Mexico. End Note.) Glass Vitro Hospitals MEXICO 00006413 003 OF 003 Grupo Angeles Mining Penoles Grupo Mexico Railroads Ferromex Ferrosur (owned by Carlos Slim’s Empresa Frisco) Kansas City Southern Telecommunications Telmex (owned by Carlos Slim’s Grupo Carso) Telcel (Radiomovil Dipsa/America Movil) Tortillas Gruma-Grupo Maseca Minsa ——- ¶4. (SBU) For some time now, Bank of Mexico Governor Ortiz has been a key voice in calling for the elimination of monopolies. He is a key spokesperson on this issue because of his high profile and because he is not directly connected with vested interest groups — unlike some members of the GOM Executive branch. Mexico has made notable progress in promoting competition over the past year (e.g. passage of a competition law), but it has a long way to go. Making further headway in this area will require significant political will, as it entails incoming government officials taking on powerful unions and, in some cases, the people who financed their campaigns. End Comment. BASSETT |
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| TAGS | ECON ELAB EFIN PINR PGOV MX |
| ADDED | 2011-03-17 12:12:00 |
| STAMP | 2011-03-21 11:24:33 |
| VOTE_POINTS | 0 |
| VOTE_COUNT | 0 |
| VOTE_RATING | 0 |
| PRIORITY | PP |
| TWEETS | 0 |
| MANUAL | N |
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| ISNEW | N |
| FINGERPRINT1 | 44220f88e059c9da43b0cc67d5aaf0a9 |