Mexico: Monopolies cause 98% overcharges on consumer products, study reveals

Lack of competition and market monopolies cause Mexican households to pay a premium of up to 98.23% when buying consumer goods, including corn tortillas, bread, eggs, fruits and vegetables, medicines, and more, as well as services such as transportation. This is the conclusion from a study conducted by the Federal Commission for Economic Competition (COFECE).

The rise in prices caused by lack of competition has a greater impact in the southwest of the country. Southern states with high poverty rates, such as Chiapas, Guerrero and Oaxaca, have seen a reduction in purchasing power of up to 47% compared to their counterparts in northern states.

The escalation is mainly due to the lack of economic competition since “a company can raise prices and retain its customers because it has few or no competitors,” the study says on the impact of market power on the welfare of Mexican households. The study covered 46 cities across the country, distributed over 8 geographical regions. For its calculations COFECE used data from the National Institute of Statistics, Geography and Informatics (INEGI) data from 2014.