Guatemala Businesses Report 14% Increase in Contraband

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Contraband smuggling in Guatemala has increased 14 percent over the last year, says the country’s business community, a rise that could be connected to the fragmentation of organized crime.

According to statistics from private sector companies, the flow of contraband products has increased 14 percent over the last year, and is expected to rise to 20 percent in the final two months of 2013, as products enter the market for the holiday season, reported El Periodico

According to Guatemala’s anti-contraband agency Conacon, illegal commerce costs the country up to $1.6 billion annually, with most of the losses in the tobacco, alcohol and gasoline industries. Alcohol is the most sold contraband product, according to the president of the Guatemalan Chamber of Industry (CIG), Fernando Lopez.

Business organizations found that the number of gallons of contraband gasoline sold daily has risen from an average of 200,000 in 2012 to up to 325,000 this year, though the head of Shell Guatemala said that contraband gasoline sales had dropped.

InSight Crime Analysis

Contraband smuggling forms a major part of the local economy in some regions of Guatemala. Global monitoring organizations estimate that over 18 percent of all cigarettes sold in the country are illegal, and Guatemalan smuggling rings have been found to bring in contraband fuel from Mexico and El Salvador.

Guatemala’s black market has historically been largely controlled by crime families such as the Lorenzanas, Mendozas and Leones. These groups began as thieves and contraband runners, then used their traditional routes to begin trafficking other supplies, including drugs and arms, within the country and to other organizations, particularly the Zetas and the Sinaloa Cartel. Mexican drug trafficking groups, especially the Zetas, have also expanded into the contraband sector.

SEE ALSO: Guatemala News and Profiles

The last few years has seen a fragmentation of organized crime both in Mexico and in Guatemala. This sort of fragmentation often leads to a diversification of criminal activities, as local factions of larger criminal structures focus on alternative sources of revenues outside of international drug trafficking. With the Zetas in particular having lost territory and influence, this may go some way to explaining the increase in contraband smuggling.

However, it is also worth noting, that such large increases in such a small period of time are highly unusual, and the statistical analysis may in itself be flawed or inaccurate.

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