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MEXICO
Consumers on the Offensive
By Emilio Godoy
MEXICO CITY, Mar 13, 2010 (IPS) - Mexican consumers are currently facing a combination of price rises, economic recession and lack of legal protection in the face of abuses committed by providers of goods and services.
These problems will be the main points on the agenda of the first national convention of consumer rights groups in Mexico, to be held in the capital Saturday.
"We want to build a national agenda for the consumer rights movement, to fight monopolistic practices or services that do not live up to what they promise," Dolores Rojas, campaigns coordinator in the Mexican office of the international development agency Oxfam, one of the organisers of the convention, told IPS.
Although a federal consumer protection agency (PROFECO) was created in 1976 under the Economy Ministry, it lacks legal teeth.
"There is a significant transfer of resources from consumers to the large food industry groups, which control entire markets," Alfonso Ramírez, founder and head of El Barzón, the powerful Mexican debtors' movement that arose after the 1995 crisis which decimated savings in bank accounts, told IPS.
El Barzón is another of the organisers of the meeting, held ahead of World Consumer Rights Day, celebrated Mar. 15.
In February, inflation stood at 0.58 percent, the highest monthly rate in six years, driven up by prices of products like fruits and vegetables, and by fees for public services.
In 2009, Mexico was one of the Latin American countries hit hardest by the global economic and financial crisis that originated in the United States.
More than 400,000 jobs were lost, GDP shrank six percent, and some 48 million of the country's 107 million people were below the poverty line.
But not everyone suffered. In fact, some people in Mexico saw their fortunes grow, as shown by the latest ranking published by Forbes magazine Wednesday.
According to the publication, Mexico's Carlos Slim is now the richest man in the world. Having amassed 53.5 billion dollars, he beat Microsoft founder Bill Gates and investor Warren Buffett, both from the U.S.
The nine Mexicans included on the list of the 1,011 billionaires identified by Forbes saw their wealth grow 63 percent, from 55.1 billion dollars in 2009 to 90.3 billion dollars today, according to estimates by the El Semanario financial magazine.
The Mexican billionaires include Ricardo Salinas and Emilio Azcárraga, the owners of the country's two big television networks, Television Azteca and Univision, which monopolise the small screen in Mexico.
Forbes also included Joaquín "El Chapo" Guzmán, the head of the Sinaloa drug cartel, who is worth one billion dollars.
"There is a direct relationship between that wealth and monopolistic practices," said Ramírez.
Slim is the owner of Mexico's largest telecoms operator, Telmex, accused by the Federal Competition Commission (CFC), the country's antitrust body, of dominating the markets it serves. He also owns hotel and restaurant chains, building firms, a bank and some of Mexico's best-known department stores.
This year is the 20th anniversary of the privatisation of Telmex, and the 15th year since the long-distance telephone market was opened up to competition.
Each Mexican family pays an average of 5,700 dollars a year into the coffers of monopolistic corporations, mainly in areas like telecoms, finance and energy, according to CFC statistics.
The 2009 edition of the Communications Outlook report by the Organisation for Economic Cooperation and Development (OECD) says Mexico has the most expensive international and business calls, cell-phone services and broadband Internet services - Slim's territory - of the 31-member grouping known as the rich countries' club.
In December, the Senate approved a reform of article 17 of the Mexican constitution in order to open the door to class-action lawsuits filed by groups of people against companies.
"Mexico took a great stride forward by creating PROFECO, but we are now lagging behind in terms of class-action lawsuits, for example," José Ovalle, a professor at the National Autonomous University of Mexico's Institute of Legal Research, told IPS.
The constitutional reform is expected to be passed by Congress before the middle of the year. After that it would need to be approved by at least 17 state legislatures in order to go into effect.
"Consumers have great power, because we decide what we consume," Alejandro Calvillo, head of the El Poder del Consumidor consumer group, another of the organisers of Saturday's convention, remarked to IPS. "We want the public interest to prevail over business interests."
The 1992 federal consumer protection law regulates class-action lawsuits, but they can only be brought by PROFECO, and not directly by consumers who have been negatively affected by a company.
Only three such suits have ever been filed by PROFECO.
A reform of the federal antitrust law, which would expand the CFC's enforcement powers against monopolies, such as by creating stiffer penalties, is also making its way through Congress.
In February, the CFC fined six pharmaceutical companies a total of 11.7 million dollars for colluding to win tenders held by the IMSS social security agency and to drive up the price of medical supplies bought by the agency between 2003 and 2006.
"This is a necessary reform. Consumers, or consumer organisations, have to be given the power to directly bring lawsuits in court," said Ovalle.
(END)
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