Tag Archives: economy

2021, January 2021

OXXO – What’s Behind the Ox in the Room?

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By Brooke Gazer

With eight locations in Huatulco, OXXO signs seem to be multiplying like a squad of bunnies all across Mexico. Who are they and where are they from?

In 1977, the first OXXO stores opened in Monterrey, selling mainly beer, snacks and cigarettes. The name originated with a stylized logo that resembled a shopping cart. Two diagonally stacked XX’s formed the frame of the cart, and the O’s on either end looked like wheels. Before long OXXO expanded its inventory to compete with the 7-Eleven international chain, which had opened its first Mexican store in Monterrey in 1971.

Brandishing a simplified logo, OXXO now boasts in excess of 18,000 convenience stores across Mexico, and the chain is rapidly expanding throughout Latin America. It is estimated that OXXO serves 13 million customers daily. If convenience stores were part of a farm, OXXO would be the Ox – the biggest animal and the one who controls the most pasture.

The OXXO brand is owned by FEMSA (Fomento Económico Mexicano, S.A.B. de C.V.), the fifth-largest company in Mexico. FEMSA has far-reaching tentacles into a vast number of other companies in Mexico and throughout much of Latin America. It is the second-largest Coca-Cola bottler in the world; Del Valle fruit juice is also bottled under the Coca-Cola brand. FEMSA owns 20% of The Heineken Company’s international operations, including Cervecería Cuauhtémoc Moctezuma, a major Mexican major brewery, which means FEMSA controls sales and operations of not only Heineken Beer, but Dos Equis, Sol, Tecate, Bohemia, Superior, Carta Blanca Indio, and Noche Buena. It might be safe to assume that all the beverages inside the refrigerated wall of the OXXO stores are controlled by FEMSA. But this mega corporation also has a refrigeration division, so it is likely that the coolers belong to FEMSA as well.

Solistica, another branch of FEMSA, controls much of the beverage distribution in Mexico, moving its brands from production to warehouse to point of sale locations such as OXXO and its competitors.

A favored location for OXXO stores is adjacent to gas stations, so FEMSA has been a major franchisee of Pemex stations. When Mexico reformed the laws that ended Pemex’s monopoly on petroleum, FEMSA began investing in this sector as well. OXXO Gas has yet to arrive in the state of Oaxaca, but there are over three hundred OXXO gas stations dotting the rest of the map of Mexico. In the past, the government set the price of fuel through Pemex, but could FEMSA trucks buy their own fuel at a discount?

The little beer store OXXO has come a long, long way in just over forty years, and they continue to expand their services. It is estimated that about sixty percent of Mexicans have no bank account – OXXO saw a tremendous opportunity. They introduced computer scanning software that allows anyone to plunk down cash and pay for goods bought online, partnering with retailers like Amazon and Mercado Libre. Like VISA, OXXO charges a percentage to the merchant, and they add ten pesos to the buyer’s purchase price. Even those with bank accounts might find this service useful. You can deposit cash into someone’s bank account simply by giving the receiving person’s bank card number. For a mere ten pesos, it’s quicker, easier, and more accessible than going to the bank.

Without question, OXXO is a convenient place to stop for a snack or a drink. It is easy to spot these ubiquitous outlets and they have so much to offer. I’ve used the payment option myself when my bank card was being uncooperative. But I worry, just a bit, when one firm has so much control over a market. It’s practically impossible for independently owned stores to compete with these clean, well-lit, well-stocked convenience stores. But when the company also controls the product and its distribution, it is no longer an even playing field. Yes, the customer wins – at the moment. But what if they became the only game in town?

Brooke Gazer operates Agua Azul la Villa, an ocean-view B&B in Huatulco (www.bbaguaazul.com).

2021, January 2021

The History of the Cow in Mexico

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By Kary Vannice

In 1521, Capitan Gregorio de Villalobos set sail, probably out of Santo Domingo on the island of Hispaniola, but there’s evidence he left from Cuba, heading for Veracruz, Mexico, with some heavy weight contraband on board – contraband that would forever change the culture and landscape of North America. Below decks he harbored six cows and one bull, at a time when cattle trading was strictly prohibited in Mexico.

Cattle, first brought to the Caribbean islands by Christopher Columbus, had not yet made their way to Mexico. Spanish stock raisers, afraid they would lose their monopoly for the supply of cattle to the Spanish settlements, had petitioned the crown to institute severe restrictions on the delivery of brood stock to Mexico. They had good reason – the vast landscapes of Mexico made for ideal grazing country.

Modern day cows come from a breed of animal that was domesticated about 10,000 years ago in Asia. This huge beast, called an auroch, was about twice the size of a cow today and originated in India, spread into China, then the Middle East, and eventually to northern Africa and finally to Europe.

When European sailors brought cattle to the Caribbean islands they were a thin-legged, wiry Moorish-Andalusian breed known as “black cattle” (ganado prieto). Turned loose and left on their own, it didn’t take long in their new lush surroundings for them to evolve into the heavy-boned, swift breed that Villalobos smuggled into Mexico.

These first cows arrived in Mexico just as Cortés and his men were completing their conquest of the indigenous peoples of Mexico. By the end of 1521, the conquistadors had all the money and power they could want, but they found the local meat supply not to their liking. Thus, Cortes himself petitioned King Charles V of Spain to lift the restriction on cattle importation.

To supply his men with the meat they desired, Cortés developed a breeding program in the high-altitude valley of Mexicalzimgo (around what is now San Mateo Mexicaltzingo, south of Toluca) and started the tradition of cattle raising in Mexico. The modern-day practice of branding is even attributed to Cortes, who it is said branded all his cattle with three crosses, the first brand recorded in North America.

Soon, missionaries also arrived on the shores of Mexico. As they established communities around their new age culture and religion, rich European landowners mounted native Indians on well-trained horses and began teaching them to handle cattle using methods originating from the Iberian Peninsula in Spain. Missions became the impetus for encouraging the local indigenous people to raise livestock, to supply a steady stream of meat to the growing population of Anglos arriving from Europe.

Native cow handlers quickly blended their local knowledge with their new skill of horsemanship and surpassed their European counterparts in both skill and precision. The wide open spaces of Northern Mexico became a major center for raising cattle. Ranching, farming and trading of livestock became the primary economic activity in that region, which we know today as Texas.

Over the next two hundred and fifty years, the cattle industry grew in Mexico, which at the time included New Mexico, Utah, Nevada, Arizona, California, Texas, and western Colorado. With such a vast territory and no way to contain herds to a specific tract of land, huge roundups were often held to collect cattle for sale and transport. With their expert horsemanship and roping skills, the hard-riding vaqueros and charros controlled the chaos and laid the foundation for our modern day cowboy culture.

During the Mexican-American War of 1846-48, the number of wild cattle increased as ranchers on both sides turned their attention toward the war effort and no longer had time to organize the huge roundups required to regroup the scattered herds.

After the war ended, with a newly established border, the two countries developed common routes for moving large amounts of cattle between the north and south. The most famous was the Chisholm Trail, which became the path for the greatest movement of cattle ever known. This established a trade network for cattle between the two North American countries and cemented a strong ranching culture in both countries that remains to this day.

An extension of ranching culture in both the USA and Mexico is the rodeo, where charros show off their skills in horsemanship, cow handling, and bull riding. Another Spanish tradition that would not exist without the cow, and is still practiced today in some Mexican cities, is the bull fight.

While the ranching and cowboy culture remain strong in many of the states in both Mexico and the United States, the cattle industry has largely become an industrial affair. Today, industrially raised cattle account for nearly half of the cattle in each country.

In 2016, Mexico reported over 16 million head of cattle within its borders, the vast majority of which would not be considered “open range” cattle, but instead are raised in feedlots to produce meat for both Mexican and foreign markets.

In 2019 beef ranked 58th among Mexico’s top 100 exports, bringing in over a billion dollars in revenue for the country. And that amount does not take into account any of the byproducts such as tallow, rawhide, bones, horns and hooves.

The 2020 beef export numbers may be even stronger because of the pandemic. When factories in the United States were forced to shut down due to COVID-19 protocols, Mexico beef producers came to the rescue. Between January and May, Mexico’s meat export numbers were 32.6% higher than they were in 2019.

So, from its first illegal origins on the shores of Mexico 500 years ago, the humble cow has not only shaped a distinct part of Mexican culture but has also become a major economic contributor to the Mexican economy.

May/June 2020

Earth Day Celebrates Mother Earth – Do We?

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By Kary Vannice

April 22, 2020, marked the 50th anniversary of Earth Day, our annual celebration of Mother Earth. A day when we pay homage to the natural beauty that surrounds us and take stock of the environmental quagmire we find ourselves in 50 years after the start of the environmental movement.

There are few who would balk at calling our planet “Mother Earth”; after all, she does provide us with the essentials to maintain human life – food, water, and shelter (for some). But would any of us really treat our true mother as we treat Mother Nature?

Fifty years is a milestone, a time when we often take stock and look back to see how far we’ve come, to assess the progress that’s been made … or not made.

On the first Earth Day in 1970, 20 million Americans, one in every 10 people, took to the streets demanding that the US government pass laws to protect them, the animals, and the environment from rampant air and water pollution, which, at that time, was almost completely unregulated.

Celebrations of Earth Day 2020, due to the COVID-19 virus “shelter in place” orders in 45 of the 50 United States, have been almost entirely virtual, and have exerted much less impact. It has been the same in Mexico, where one scientist candidly pointed out the irony of the situation: “Social distancing from home will imply an excessive increase in the use of electrical energy. The consumption of electrical energy is one of the factors that produces the greatest number of carbon dioxide (CO2) emissions. This electrical power will burn more fuel, considerably polluting the atmosphere.”

But, while the only thing these situations may seem to have in common is irony, that’s not entirely true, as this excerpt from an Earth Day article published on Fortune.com points out.

Virologists and scientists say that our broken relationship with nature is at the very heart of this pandemic. Accelerating biodiversity loss—caused by a mix of pollution, over farming, urbanization, and changing temperatures—has made complex ecosystems much simpler and more unstable. That makes it easier for viruses to jump from animals to people, as they have begun to do with alarming frequency.

The truth is, we haven’t come far enough in 50 years. While some things have gotten better, many have gotten worse, and we are not where many eager young environmentalists had hoped we would be in 2020.

On the first Earth Day, polluted rivers, many of them veritable oil slicks from factories’ unremittent dumping, were a top agenda item. And, while most first-world countries have indeed regulated corporate sludge dumping, some developing countries still lag far behind. And our oceans are far more polluted than they were 50 years ago, so much so that scientists can’t even quantify the effects that plastics will have on the biodiversity of sea life, not to mention the fact that our oceans are also warmer and more acidic than they were in 1970. It all adds up to a grim prognosis for all, not just our fishy friends, since biodiversity really is the key to health, at both the macro and the micro level.

This year on Earth Day, The New York Times reported that the World Wildlife Fund estimates that, on average, thousands of different wildlife populations have declined by 60 percent since1970. And that “last year, a comprehensive scientific assessment from the United Nations warned that unless nations step up their efforts to protect what natural habitats are left, they could witness the disappearance of 40 percent of amphibian species, one-third of marine mammals and one-third of reef-forming corals.”

We haven’t done much better on land either. The rate of rainforest destruction has also increased. Before the 1970s, deforestation in the Amazon was mostly done by local farmers, clearing the land to grow crops. In the latter part of the century, deforestation became more of an industrial affair, when large-scale agriculture entered the region. By the 2000s, cattle ranching was the number one cause. In 2018, 30 million acres of the Amazon rainforest were lost. That was slightly less than in recent years, but it’s not slowing fast enough.

Why does it even matter? Well, this brings us back to our Mother. The Amazon has been called “the lungs of Mother Earth,” the largest producer of life-giving oxygen and a huge storehouse for carbon dioxide, which is the main cause of global warming. We humans need the trees to survive. But it doesn’t stop with the trees. The Amazon is also the richest, most biodiverse ecosystem on the planet, home to at least 10% of the world’s biodiversity. And biodiversity equals health, not just for Mother Earth, but for all her inhabitants, including humans.

After 50 years, if you run the numbers for air pollution, water pollution, environmental toxins, species extinction, deforestation, overpopulation, waste disposal, and climate change, you’ll see that while some areas have made some small gains, there are simply too many losses to make up the difference. Far too often the real issue comes down to the environment vs. the economy. And in this fight, the environment will always be the loser, unless the consumer, the true driver of global economies, starts to make environmentally friendly products and companies a priority, sending the message that they aren’t willing to sacrifice one to benefit the other.

Now consider your real mother, what would you be (or have been) willing to sacrifice for her health and well-being? Does Mother Nature not deserve the same sacrifice?

May/June 2020

Mamas and Papas – On the Road

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By Deborah Van Hoewyk

One afternoon I was in a joyería in Santa Cruz, choosing earrings for my sisters. Of course, I was being helped with my selection by an English-speaking guy. The patter always begins with “Where are you from?”

And I reply in Spanish “Estados Unidos, estado de Maine,” and then assure him it’s right next to Canada, trying to ward off the complex issues involved in Mexican perceptions of the U.S.

“Oh, I have been to Maine, I liked it.”

“Wow, why did you go all the way to Maine?”

“Blueberries, I picked blueberries.”

This is not a fun thing to do in Maine. This is long days, bent over the low-bush berries swinging a blueberry rake, which is pretty much a giant (8-pound) aluminum comb. You have to swing the rake through the tops of the plants and then arc it sharply back to drag the berries into the comb. By the end of that long day, it’s really hard to stand up straight.

Ángel (according to his card) fulfilled my cliché idea of a migrant agricultural worker. Young, male, clearly up for a trip to the far reaches of crops to be harvested. The rest of the cliché is that there are huge numbers of Mexican workers in the U.S. – legal and illegal – who contribute massive sums to Mexico’s economy in remesas, the remittances they send back home; in 2019, it was about $35.5 billion in U.S. dollars, and it’s predicted to exceed $37 billion U.S. in 2020. Work hard, help your family, help your village.

Who Is Off to Work Somewhere Else in the World?

Turns out, while yes, Mexicans go to work in the U.S. and Canada and send a lot of money home, guys like Ángel aren’t really a norm after all. All kinds of Mexicans emigrate, mamis and papis among them.

In 2016, 16,348,000 Mexicans were working – legally or illegally – in the U.S., a little over 10% of the U.S. workforce. Although the current U.S. government seems to see immigration from Mexico as a major threat to the American economy and society, the number of Mexicans trying to enter the U.S. has dropped by more than half since the end of 2007, when America’s Great Recession began. And even when the economy began to improve in 2013, Mexican immigration to the U.S. continued to decline. Between 2010 and 2018, the number of undocumented Mexican immigrants in the U.S. dropped by 23%, not so much because deportation was pushing them out, but because the improving Mexican economy has been pulling them home.

In 2018, somewhat more Mexican men (53.4%) than women (46.6%) went north for work, because many jobs available to Mexicans in the U.S. are traditionally done by men. For example, the biggest U.S. employment sector for Mexicans is construction, which provides one-fifth of all their jobs – 97.4% of those jobs are held by men. Men are in the majority when Mexicans head to places where tough work is necessary, Central and South America and the developing countries of East Asia and the Pacific. On the other hand, when you look at Mexican emigration to countries with higher-wage, higher-skilled jobs available to immigrants, women are in the majority heading to Europe, Eastern Europe, the North Africa and the Middle East, Africa, Central Asia, and the developed countries of East Asia and the Pacific.

Are the Kids All Right?

In and of itself, emigration of one or the other parent changes a Mexican child’s family structure, although it’s only recently that researchers have begun looking at what happens to those left behind. In her book, Divided by Borders: Mexican Migrants and Their Children (University of California Press, 2010), sociologist Joanna Dreby describes a parent’s decision to migrate as “a gamble; by leaving their children, migrant parents hope to better provide for them. Their migration and hard work represent a sacrifice of everyday comforts for the sake of their children and their children’s future.”

And what are the odds of winning this gamble?  Only so-so.  Using children’s education to measure the success of the migration sacrifice, Dreby finds that when a father migrates, there is little effect on children’s education, as the mother left behind ensures that it will continue as before.  If a single mother migrates, her children, especially girls, tend to do better in school because they are motivated by her courage and sacrifice in migrating.  If both parents migrate, and children are left behind with relatives or friends, their commitment to education suffers significantly.

One measure of educational aspiration – the desire to complete your education because you believe it will bring a better future – is, interestingly, the time kids spend on homework. Not whether they get it right, but whether they make the time to finish it.  A study done in Puebla suggests that it depends not just on whether the student’s mother, father, or both parents migrated, but on whether the student was a boy or a girl.

When both parents had left the household, nearly 90% of girls wanted to continue their schooling, while only 33% of the boys did.  If only the father had migrated, 76% of the girls aspired to further schooling, but, again, only a third of the boys.  If only their mother had migrated, 100% of girls wanted to finish school, but only 30% of the boys.  It’s been suggested that boys whose parents, especially the fathers, have migrated, the expectation is that they, too, will migrate lessens commitment to more schooling.

In contrast, in households that had not experienced migration, girls were less committed to continuing their education, but boys were more committed.

In two-parent non-migrant households, 73% of girls and 51% of boys wanted to continue their schooling; in non-migrant households headed by a single mother, 67% of girls and 56% of boys wanted to do so.

Having a parent leave the household has another effect on the children left behind – someone has to pick up the responsibilities for the absent parent. The Puebla research asked children about cooking and feeding the family, cleaning the house, babysitting, helping siblings with homework, and feeding livestock. Obviously, more of the burden falls on girls than on boys, so their academic commitment is all the more impressive.

And the Future of Economic Migration?
If migrating mamas and papas work hard in unforgiving jobs under difficult conditions, if the parental gamble that more money buys a better future is showing only mixed results for the kids they left behind (especially for the boys), will Mexican economic migration continue to decline right out of existence? If blunt-force immigration enforcement at the U.S. border but an improving Mexican economy continue, will this be an issue of the past?

Back in the blueberry fields of Maine, according to the Bangor Daily News, the hard work took place in a festive atmosphere, “Mariachi music booms from loudspeakers, a roving lunch truck hawks authentic Mexican fare and workers jibe one another in their native Spanish.” But that was the summer of 2013, and as the number of migrant workers decreases, blueberry companies are investing in machinery to do the work – which, in turn, means even fewer workers. In the midst of a pandemic that has taught Americans that their food depends not on the supermarket but Mexican agricultural labor, “Quien sabe?”