MEXICO CITY -- Enter a store in Mexico, and youre likely to find only two brands of fresh milk, Lala and Alpura. The two companies control the market. The same goes for beer. Two conglomerates have a lock.
In fresh bread, most brands belong to Bimbo, a massive company.
Pick up the cellphone on the way home, and youll probably be enriching the worlds wealthiest man, Carlos Slim Helu, who controls Telcel, Mexicos biggest cellular network. Another company Slim owns, Telmex, operates nearly all of Mexicos fixed-line telephones.
Mexico is a country of concentrated economic power, and in some cases outright monopolies. Its an arrangement that limits Mexicos hopes of a thriving economy, chokes its consumers, discourages competition and prevents better products and services from emerging in the marketplace. Its been this way for decades, and analysts caution against expecting change anytime soon.
Dont expect a serious debate about it on the television news, either. Two networks control 97 percent of the countrys television viewership and even more of the advertising revenue it generates.
The impact on Mexico and, by limiting that countrys growth, on the United States is huge. Mexicos chief anti-trust official, Eduardo Perez Motta, says poor Mexicans pay as much as 40 percent more than they should for basic goods and services because of monopolistic practices. It also hobbles the economy. Greater competition, economists say, would lower prices, create stronger companies and accelerate growth, lifting the nation more quickly.
Yet its a topic that rarely has come up in the political campaign that culminates July 1 with the election of a new president, wholl serve a six-year term starting Dec. 1. Neither the likely winner, Enrique Pena Nieto of the Institutional Revolutionary Party, nor the candidate of the ruling National Action Party, Josefina Vazquez Mota, has raised the issue in campaign appearances. Andres Manuel Lopez Obrador, of the leftist Democratic Revolutionary Party, has campaigned against monopolies, but hes largely confined his criticism to Telmex, and, oddly, the U.S. retailer Walmart.
Experts blame Mexicos business environment squarely on the countrys political system, where politicians do the bidding of tycoons, government doesnt regulate the businesses it can, and favoritism and negotiation when it comes to applying the law is the norm.
The problem of monopolies in Mexico, epitomized by Carlos Slim, is not a problem of businessmen. Its a problem of government, said Eduardo Garcia, a veteran Slim watcher and the director of the financial website Sentido Comun, or Common Sense. If you and I were running these companies and saw the weaknesses of the state, wed do it, too.
Nor is it a problem just of private companies. The state also has monopolies. All gas stations in Mexico carry the green, white and red logo of Pemex, the state oil company. All electricity comes from a state utility, which gives subsidized rates to the poor but charges among the highest rates in the Western Hemisphere for the rest. Even then, the inefficient utility requires a steady stream of government cash to keep operating.
Theres no reason for it to be a public monopoly, said Ernesto M. Flores-Roux, a University of Chicago-trained statistician who works at Mexicos Center for Research and Teaching in Economics, a research center. Its not like oil, where theres this nationalist argument.