Drug gangs diversify their business activities

Wise investors know that diversification is a sound way to protect their resources, and Mexico’s drug cartels have apparently been well educated in this regard. Recent news reports have highlighted two new ways in which Mexico’s drug cartels preserve and grow their wealth: the marketing of pirated merchandise, and the theft and sale of natural gas concentrates.

Marketing of pirated merchandise

According to an article originally published in the Dallas News, Mexico’s drug gangs now make almost as much money from pirated merchandise as from their trade in illicit drugs. By some estimates, the proliferation of pirated brand name goods has resulted in more than 450,000 manufacturing job losses and has caused the demise of many textile, clothing and shoe-making firms. Officials say that pirated videos account for as many as 9 out of every 10 movies sold across the country.

Theft of natural gas concentrates

Mexico’s giant Burgos natural gas field, which straddles the northern states of Tamaulipas, Nuevo León and Coahuila, lies in a zone which has become a center for violence in Mexico’s drug wars. Pemex, Mexico’s state-owned oil giant, claims that up to 40% of the gas concentrate produced has been stolen since 2006, as drug gangs have systematically targeted, kidnapped and intimidated oil workers. In some cases, cartels have even constructed their own pipelines to siphon off the gas, before filling their own tankers and driving them across the border using forged documentation.

Pemex has filed suit in Texas against eleven US firms (including Plains All American Pipeline LP, SemCrude, and Western Refining), alleging that they purchased up to 300 million dollars of fuel illegally acquired by drug gangs from Mexican pipelines and then shipped across the border. According to Pemex lawyers, the US firms may have been complicit in the forging of documents required for the gas concentrate shipments to cross the border, and profited (knowingly or unwittingly) from the trafficking of stolen fuel.