VZCZCXRO4906
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #6413/01 3131622
ZNR UUUUU ZZH
P 091622Z NOV 06
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 4147
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC

85174
2006-11-09 16:22:00
06MEXICO6413
Embassy Mexico
UNCLASSIFIED//FOR OFFICIAL USE ONLY

VZCZCXRO4906
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #6413/01 3131622
ZNR UUUUU ZZH
P 091622Z NOV 06
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 4147
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC

UNCLAS SECTION 01 OF 03 MEXICO 006413 
 
SIPDIS 
 
SENSITIVE, SIPDIS 
 
FOR WHA/MEX, WHA/EPSC, AND EB/IFD/OMA 
USDOC FOR 4320/ITA/MAC/WH/ONAFTA/ARUDMAN 
TREASURY FOR IA (ALICE FAIBISHENKO) 
STATE PASS TO USTR (EISSENSTAT/MELLE) 
STATE PASS TO FEDERAL RESERVE (CARLOS ARTETA) 
STATE PASS TO JUSTICE DEPARTMENT ANTI-TRUST DIVISION 
(CALDWELL HARROP, KIMBERLY GARNETT, ANNE MARIE CUSHMAC) 
 
E.O. 12958: N/A 
TAGS: ECON ELAB EFIN PINR PGOV MX
SUBJECT: WHO ARE MEXICO'S MONOPOLISTS? 
 
 
------- 
Summary 
------- 
 
¶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. 
 
--------------------------------------------- ----- 
Summit Participants Highlight Need for Competition 
--------------------------------------------- ----- 
 
¶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 
CEO: Andres Conesa 
Market share: 39.7% 
 
Mexicana 
CEO: Gaston Azcarraga 
Market share: 36% 
 
(Note:  The introduction of low-cost airlines is expected 
to increase competition in the domestic market.  End Note.) 
 
Beer 
---- 
 
Grupo Modelo 
Chairman and CEO: Carlos Fernandez Gonzalez 
Market share: 65.2% 
 
Cerveceria Cuauhtemoc Moctezuma 
Chairman: Jose Antonio Fernandez Carbajal 
Market share: 43% 
 
Bottling 
-------- 
 
Coca-Cola FEMSA 
Chairman: Jose Antonio Fernandez Carbajal 
DG: Carlos Salazar 
Market share: 70% 
 
Pepsico 
 
MEXICO 00006413  002 OF 003 
 
 
CEO and DG: Oscar Cazares 
Market share: 15% 
 
Bread 
----- 
 
Bimbo 
Chairman of the Board: Roberto Servitje Sendra 
DG: Daniel Servitje 
Market share: 67.8% 
 
Broadcasting 
------------ 
 
Televisa 
Chairman and CEO: Emilio Azcarraga Jean 
Market share: 56% of Mexico's TV stations 
 
TV Azteca 
Chairman and CEO: Ricardo Salinas Pliego 
Market share: 38% of Mexico's TV stations 
 
Cablevision (owned by Televisa) 
Chairman of the Board: Emilio Azcarraga Jean 
DG: Juan Paul Broc 
Market share: majority of market for cable TV 
 
Sky (owned by Televisa) 
Chairman of the Board: Emilio Azcarraga Jean 
DG: Alexandre Moreira 
Market share: majority of market for satellite TV 
 
Cement 
------ 
 
Cemex 
Chairman and CEO: Lorenzo Zambrano 
Market share: 87.6% 
 
Holcim Apasco 
DG: Pierre Froidevaux 
Market share: 12.4% 
 
Energy 
------ 
 
Pemex 
DG: Luis Ramirez Corzo 
 
Federal Electricity Comisisn (CFE) 
DG: Alfredo Elias Ayub 
 
Luz y Fuerza del Centro (LyFC) 
DG: Luis de Pablo Serna 
 
Financial Services 
------------------ 
 
BBVA Bancomer (Spain), Banamex Citigroup (U.S.), Santander 
Serfin (Spain), Banorte (Mexico), HSBC (UK), and 
Scotiabank-Inverlat (Canada) have over 90% of the market. 
 
(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 
Chairman and CEO: Adrian Sada Gonzalez 
DG: Federico Sada 
Market share: 73.8% 
 
Hospitals 
--------- 
 
MEXICO 00006413  003 OF 003 
 
 
 
Grupo Angeles 
Chairman: Olegario Vazquez Aldir 
Market share: 67% 
 
Mining 
------ 
 
Penoles 
Chairman: Alberto Bailleres 
DG: Jaime Lomelin 
Market share: 52% of gold, 97% of silver, and 90% of sodium 
sulfate 
 
Grupo Mexico 
Chairman and CEO: German Larrea 
Market share: 88% of copper 
 
Railroads 
--------- 
 
Ferromex 
DG: John Kelly Joseph 
Market share: 58% 
 
Ferrosur (owned by Carlos Slim's Empresa Frisco) 
DG: Daniel Torres 
Market share: 15% 
 
Kansas City Southern 
Chairman: Michael Harverty 
Market share: 27% 
 
Telecommunications 
------------------ 
 
Telmex (owned by Carlos Slim's Grupo Carso) 
Chairman of the Board: Jaime Chico Pardo 
DG: Hector Slim Seade 
Market share: 95% of landlines 
 
Telcel (Radiomovil Dipsa/America Movil) 
(owned by Carlos Slim's Grupo Carso) 
Chairman of the Board: Carlos Slim Helu 
DG: Daniel Hajj Aboumrad 
Market share: 80% of cellular service 
 
Tortillas 
--------- 
 
Gruma-Grupo Maseca 
Chairman and CEO: Roberto Gonzalez Barrera 
Market share: 73% 
 
Minsa 
Chairman: Juan Jaime Petersen 
DG: Jose Cacho Ribeiro 
Market share: 15% 
 
------- 
Comment 
------- 
 
¶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