MEXICO CITY (Reuters) – Mexico’s antitrust watchdog said in a preliminary ruling on Monday that corn flour and tortilla maker Gourma has the authority to fix price gouging, saying an investigation found that concluded that the situation was uncompetitive.
“This market is fundamental to the Mexican economy and the well-being of consumers, especially as it affects the price of tortillas,” the watchdog group known as Cofes said.
Corn tortillas are a staple food in Mexico, consumed daily by 70% of the population. The cost of tortillas accounts for about 6% of a household’s food budget.
Kofes pointed out that Gurma controls between 50% and 90% of corn flour sales in eight regions of the country. To restore competition and keep prices down, authorities recommended the company sell five corn flour factories and halt commercial strategies such as making it difficult for tortilla makers to change suppliers. did.
Cofes research reveals that Gurma controls far more corn flour market share than anywhere else, ranging from 22 times to 80 times that of its largest competitor across eight regions. . It also revealed that Gruma’s average price is nearly 10% higher than its domestic competitors.
Gurma shares fell about 10% in intraday trading after the preliminary ruling was announced, trading at about 36 pesos per share on Mexico’s main index.
In a statement released after the decision, Gurma said he was cooperating fully with Cofes. It says it has always operated legally.
The company added that due to the preliminary nature of the ruling, it is impossible to predict how the Antitrust Agency’s governing body will ultimately resolve the case.
According to the watchdog’s announcement published in the Official Gazette, the investigation targeted both the distribution and marketing of corn and corn flour and related services.
Mr. Gurma and other interested parties will now be able to make their claims before the governing body considers all evidence and makes a final judgment.
Until then, Gruma is not obligated to take any action.
(Reporting by Raul Cortés Fernández and David Alire García in Mexico City; Editing by Emelia Sithole-Matarise, Matthew Ruiz and Aurora Ellis)
