The competition regulator in Mexico accepted the measures presented by the corn flour producer Gruma to eliminate contractual restrictions that prevented tortilla factories from freely choosing their supplier.
The company, owner of Maseca, will modify all its contracts, present and future, so that it eliminates all exclusivity or minimum consumption obligations previously imposed on tortilla factory owners, as well as their penalties, and will transfer, at no additional cost, all the tortilla makers and mixers associated with those contracts.
“As a result of this, the tortilla makers will no longer be tied to Gruma, they will have greater freedom to choose the corn flour supplier of their choice and will dramatically reduce the costs they face,” the National Antimonopoly Commission (CNA) stated in a statement last night.
The regulator’s announcement follows the completion of a procedure to eliminate barriers and restrictions in the corn flour market.
Read: Gruma has the worst fall on the stock market in more than 12 years after the regulator’s accusation
At the end of 2022, the previous competition regulator in Mexico began an investigation into this market. In October 2024, it reported that there was no effective competition in the production, sale and distribution of corn flour for tortillas, and pointed out Gruma for taking over the majority of the market.
The then Federal Economic Competition Commission (Cofece) determined that in eight relevant geographic markets there was “a highly concentrated structure” in sales, and indicated that Gruma not only led all markets, but also had shares of between 50% and 90% of the business.
Cofece also identified that Gruma has strategies specifically designed to make it difficult for tortilla makers to change suppliers.
The investigative authority of the previous regulatory body concluded that the only solution to reactivate competition in that market was for Gruma to eliminate the strategies created to prevent tortilla factories from changing suppliers, and to sell five nixtamalized corn flour production plants, as well as the distribution fleet and sales force of those assets.
In this regard, the firm reported in a statement also yesterday that the measures accepted by the CNA do not include the divestment of assets that the authority had initially proposed, “in particular, the sale of 5 of the 18 nixtamalized corn flour mills is not required.”
Loyalty was never sought: Gruma
The company maintained in its communication on Friday that it has never sought to generate conditions of undue loyalty among tortilla shops, and said that it reiterated its commitment to competition and the correct functioning of the investigated market.
The firm added that it was notified yesterday of the acceptance of the proposed measures by the CNA, as they were considered suitable and economically viable to address the signals of the previous regulator, thus definitively concluding the administrative procedure derived from the investigation that began in 2022.
He noted that he has a period of 90 to 180 days to establish with the CNA the terms of the documentation that implements the measures, which will be sought to have immediate effects, including the modification of contracts, communications to clients and verification mechanisms agreed upon with the authority.
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The CNA specified that the price of tortilla depends on different factors, such as operating costs, energy and inputs, but that measures such as those accepted open conditions of competition that, in the medium and long term, will benefit the population.
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