The Sicilianization of Mexican Drug Cartels: An Analysis of the Extortion Industry

"Redlogarythm" and "MX" for Borderland Beat

Extortion is one of the most lucrative activities conducted by cartels in Mexico

Extortion can be defined as the action through which one individual obtains a resource from another through intimidation or threat of violence. This criminal activity has been used by organized crime groups since early modern human civilization. In fact, it has been the most common and reliable practice for criminals since it involves few risks and low costs, and can provide significant revenue if applied to the correct segment of the population. Mexico has not been an exception.

In fact, extortion has formed part of the daily Mexican life since the second half of the 20th century. The rampant political, administrative and police/armed forces corruption has created a system of thousands of individuals who make a living out of obtaining money from others by threatening them with the use of force if they refuse to make the payment. Nowadays, extortion in Mexico is manifested in many forms, including derecho/cobro de piso ("user rights"), where the business owners are asked to pay criminals periodically in order to be able to work.

In this report, Borderland Beat will analyze derecho/cobro de piso and its effect on Mexico's private sector, ranging from the humble street vendor in Mexico City to the transnational avocado industry in Michoacán. This is a very vast topic which cannot be addressed purely on the basis of economic theory. Thus, Borderland Beat developed its own field research. We interviewed several business owners in Tamaulipas and Nuevo León for this report, and asked them a range of questions about their experience. We designed this report according to their answers.

BACKGROUND: THE MEXICAN EXTORTION MARKET

Mexican criminal organizations of the early 1970s and 80s were mostly dedicated to drug trafficking, oftentimes with the complicity of corrupt members of the dominant Institutional Revolutionary Party (PRI), which ruled Mexico for over seventy years. Drug cartels did not pay too much attention to other crimes like extortion, especially because they affected the Mexican population and was not part of the unofficial pax mafiosa. 

That is not to say, however, that Mexican businesses did not suffer extortion. They did, especially at the hands of the several corrupt law enforcement agencies which were the ones managing the street-level underworld and used the money to funnel their networks. But the practice of extortion was not very relevant and never appeared as the backbone of the criminal organizations of the time.

The tides changed in the 1990s after the PRI's regime began to decline and when Mexican drug cartels began internationalizing their operations not only in the U.S. but in parts of Europe and Asia. With the weakening of the PRI, internal disputes between Mexican drug cartels became more frequent.

To face these new challenges, several criminal groups started a new diversification process. They began to recruit more people and increase their ranks to compete with rival groups. The Gulf Cartel, for example, recruited several members of the Mexican Army, including some in the Special Forces (GAFE) that were working with the Federal Judicial Police (PJF). This group of enforcers were known as Los Zetas, and served as their paramilitary wing responsible for protecting their leader Osiel Cárdenas Guillén and carrying out executions on the cartel's behalf.

As Los Zetas's role continued to expand under the Gulf Cartel, they began to recruit petty criminals in states like Michoacan, Veracruz, Nuevo Leon, Coahuila and Chiapas, and even in countries in Central America, to clear path for the cartel's expansion in these areas. These petty criminals and local gang members were absorbed into Los Zetas's local workforce.

Los Zetas expanded significantly in the 2000s; this is a map of their influence in 2010, the year they separated from the Gulf Cartel 

The way how Los Zetas expanded so quickly and effectively is not still truly clear, but what we know is that one of their offensive tactics was the monopolization and control of the illegal markets of the zones they invaded. The purpose of this illegal monopolization tactic was not only economic but tactical.

By controlling the sources of revenue of illicit markets, one can also control how the businesses and potential rivals will behave in the future. Illegal activities such as oil theft, drug distribution at the retail level, smuggling of illicit goods, prostitution, counterfeit goods commercialization fell under the control of Los Zetas.

One of the main ways by which Los Zetas ended up controlling the areas of territory where they were present was through the practice of extortion. In fact, we can say that Los Zetas were the pioneers of widespread extortion which they used not only for obtaining resources but also for achieving control of the areas where they operated.

It is extremely difficult to estimate how many businesses started paying derecho/cobro de piso since Mexico's drug war began in 2006. If we consider the fact that most extortion threats are not reported to authorities and are dutifully payed, we must suppose that the real numbers are far bigger than the official data provided.

For example, Mexico's National Citizens Observatory (Observatorio Nacional Ciudadano – ONC) provides insightful information. ONC data shows that for every 100,000 citizens, the extortion rate had a smooth growth since the 1990s. In 2006, the official extortion rate (according to the complaints received by authorities) reached 3,100 per 100,000 inhabitants, the highest ratio since 1999. Two years later, on 2008, the extortion rate skyrocketed to 5,400. In 2010, the extortion rate reached 5,700.

Between 2010 and 2012, one of the most violent periods of the Mexican drug conflict, the extortion rate paradoxically decreased, plummeting to 2,800. But then in 2013 it set a new record by reaching 6,600. Since then the official extortion rate has fluctuated heavily, decreasing between 2013 and 2016, and skyrocketing again between 2016 and 2019. It is currently in a medium range of 4,100.

If we take into account that Mexico's National Institute of Statistics and Geography (Instituto Nacional de Estadística y Geografía – INEGI) reported that in 2018 only 10.6% of the crimes in the country are reported, and that from that 10.6% only 63% are investigated, and that from those investigated only 16% reach a favorable verdict, we can conclude that the number of extortions are reported as minimal and that the size of this industry is colossal.

According to the same 2018 report by the INEGI, 5.7 million extortions were committed in Mexico. From those 5.7 million extortions 91.6% were telephone extortion while only 7.1% were formal derecho/cobro de piso.

REASONS BEHIND DERECHO/COBRO DE PISO

Why do Mexican criminal organizations engage in extortion? There are two possible answers to this question that might be correlated: (1) revenue and (2) control. The first reason is purely economical. Since criminal groups need to fund their sophisticated networks, they need cash constantly.

Because most of their operations do not render profits immediately and need a certain amount of time to generate profits (i.e. wait for a load of drugs to reach destination, contact with a kidnapped family and negotiate ransom, drain oil and sell it to a gas station, etc.) a simple option to find money in cash, easily and very quickly is to extort businesses. Criminal groups can thereby get money almost instantly and can afford their daily expenses. The extent of the profits obtained through extortion by a certain organization depends on the territory it controls and on the size/importance of the businesses located in this area.

Contrary to popular belief, the extortion industry is very organized. The extortion quotas are not assigned randomly. In most of the cases, criminal groups apply an economic rationale to their demands. For example, several businessmen from Tamaulipas interviewed for this report agreed that the extortion payments demanded by individuals linked to the Gulf Cartel were "not excessive". Although we cannot say that any extortion payment is fair, some of the interviewed agreed that the demand of MXN$2,000 pesos (approximately US$86) was not an unreasonable demand.

Borderland Beat interviewed business owners in Nuevo Leon (left, in red) and Tamaulipas (right, in red)

The second reason is purely political. Although the money obtained through extortion is always welcomed for organizations struggling to maintain a vast and sophisticated criminal network, sometimes the payment amount being requested by them can suggest that there is a "control factor" at play.

It is very difficult to estimate a certain quantity under which the quota is fair and adjusted to the business's size and revenue (especially since a large part of the Mexican economy is informal), but most of the times the extortion payments imposed to small-and-medium businesses can be absorbed and reported as operational expenses.

One of the business owners from Tamaulipas interviewed for this report stated that he had to pay MXN$2,000 (approximately US$86) to drug cartel members on the first weekend of each month. This amount is not an irreparable loss for most established businesses in the formal sector. Although the amount helps the criminal group financially, what is important to note here is that extortion businesses, however small, helps them exert dominance in a turf.

For example, if all the businesses in a certain city pay small extortion fees to the same organization, the group not only obtains liquid money but is also benefited in the sense that it can appear as the "controlling entity" in the area. Thus, the reasons behind extortion by Mexican criminal groups go beyond the purely economic reasons into the game of territorial control.

TYPES OF EXTORTION USED BY MEXICAN CRIMINAL GROUPS

When talking about the extortion rackets used by organized crime, like the derecho/cobro de piso, we cannot study it as a monolithic practice. In fact, the derecho/cobro de piso can manifest itself in different forms. We can classify the different forms of derecho/cobro de piso according to the relationship between the extortionist and the victim.

The most common relationship is the Parasitic one. In this kind of relationship the extortionist asks its victim for several payments over a long period of time and threatens to hurt the victim if the demands are not paid. This is the most common type of extortion used in Mexico since it is easy to perform and brings revenues at a minimal cost. The victim is badly damaged by this kind of extortion since they do not obtain anything from the relationship and lose money.

The second relationship is Predatory. In this example, the extortionist demands a single or one-time payment for a large amount of money. This kind of extortion is mostly connected to the kidnapping industry and is not part of the derecho/cobro de piso industry except for exceptions that are not very relevant for this study.

The third kind of relationship is called Symbiotic. In this case the extortionist demands seasonal payments from the victim but at the same time offers them their resources to achieve some kind of mutually-benefited relationship. This kind of extortion is very common in areas where organized crime has a strong presence. For example, in Italy the Sicilian Cosa Nostra exerted this kind of extortion. It demanded money from local businesses but at the same time provided them with security, contacts to further their business operations, and the reassurance that their commercial deals would work. In this kind of relationship, the extortion is mutually beneficial for both the extortionist and the victim.

Business owners oftentimes have no option but to pay extortionists, who may often work in complicity with local authorities

Although this kind of extortion requires a highly developed protection market with stable businesses and trustworthy criminal groups, we can find evidence of this Symbiotic relationship happening in Mexico. For instance, one of the businessmen consulted for the report stated that when he was approached by extortionists, they told him they were available if him or his business "needed anything". The extortionists presented themselves as protectors against robbers and debt collectors in case anyone owed the business any money.

Since the businessman said he never reached out to them, we cannot confirm if that offer was real. Many criminal groups conduct their extortions in a mechanical way: not showing special interest in the maintenance of the businesses they extort.

Nevertheless, other Latin American countries with high levels of organized crime violence like Brazil offer an excellent example of how this protection is provided. In Rio de Janeiro, for example, the criminal groups known as milicias are well known for demanding monthly payments from any kind of business (legal or informal) in the favelas. They conduct violent campaigns against petty criminals who rob or assault local businesses they extort.

In Mexico, drug cartel members have claimed to have killed suspected looters and robbers (often displaying their corpses in public with a written message). This could mean that the incidents like the ones seen in Brazil apply to Mexico as well and that in some cases protection is provided by certain groups to local businesses.

THE RESOURCES OF THE EXTORTION INDUSTRY

One of the main reasons why Mexican criminal groups get involved in extorting businesses is because of its low barriers of entry (i.e. few resources needed to perform the activity) and its low costs. Contrary to other criminal activities such as drug trafficking, which requires multiple and sophisticated resources ranging from cultivation fields to refining laboratories, extortion requires three basic elements: intelligence gathering, reputation and workforce.

The Mexican criminal groups involved in the extortion businesses might appear as entities charging money randomly to any kind of business operating in the areas under their control. Although this is partially true, most criminal groups behave like rational economic individuals who use the information at their disposal to classify businesses accordingly. According to our research, cartels consider factors like a business's industry and income range to apply a quota.

Criminal groups try to rely on intelligence gathering in order to discover, classify and charge the businesses. In fact, Mexican criminal groups can be so sophisticated in areas which are firmly under their control that they might even use government office’s data for calculating the range of payment that must be addressed by each type of business.

For example, some of the people interviewed for this report expressed their suspicions about Mexico's Tax Administration Service (Servicio de Administración Tributaria – SAT), the equivalent of the U.S. Internal Revenue Service (IRS). They said that some employees from this government agency were colluded with the Gulf Cartel and provided them with information about the different types of businesses which might be targeted for extortion in Tamaulipas.

Logo of Mexico's Tax Administration Service

Another real-life example of how sophisticated the market for extortion might become in Mexico is the case of the Michoacán avocado plantations. Michoacán is the world's leading avocado producer, accounting for 90% of the country's production. In an area less than 150,000 hectares (370,658 acres), there are at least 25,000 avocado producers with businesses of all sizes. This area covers 22 municipalities, including the major avocado-producing ones like Uruapan, Tancítaro, Zitácuaro, Tacámbaro, Peribán, Tingambato, Los Reyes, and Paracho.

A market of such importance could not escape from the Michoacán-based Knight Templar Cartel's extortion activities. In order to obtain information about the avocado businesses in the area, the Knights Templar Cartel obtained information from the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación – SAGARPA). Specifically, cartel members looked for the local permits issued by the Local Plant Health Councils to locate every avocado farmer in order to extort them.

The use of economic information obtained through the government might indicate why several criminal organizations demand extortion quotas that are usually proportionate to the business's size. For instance, according to business owners interviewed for this report, the Gulf Cartel extorted business of the same size and charged them more or less the same amount range. However, large businesses in the area, like the maquilas operating in Matamoros, were forced to pay higher quotas. This indicates that extortionists can operate in a rational way by dividing businesses depending on their size/revenue and demanding lower or higher payments depending on these factors.

The second resource for a successful extortion campaign is the reputation of the extorting group. In Mexico most extortion demands are accompanied by threats. Thus, the victim will be compelled to meet the extortionist's demands if the extortionist presents himself as a member of a criminal group known for its ruthless and reprisals against those who oppose it. For example, when a person is killed inside a business that was extorted, the extorting group might be setting an example in an attempt to discourage potential clients who are reluctant to pay. In conclusion, if a criminal group is violent, victims are more likely to pay.

The last factor is workforce. This represents the people who contact the business owners and demand the extortion payment. According to a business owner interviewed for the report, the extortionists directly went to the business site to demand the payment every month. In other cases, the contact was made indirectly.

In Guanajuato, for example, we know that certain businesses are contacted through a letter or note containing a name and phone number. The victim must make contact by phone and negotiate the payment with the extortionist remotely.

To summarize, the extortion business is cheap and easy to perform because the resources needed are basic and easy to deploy. Extortionists can do face-to-face extortion, but our research shows that they do not have to be physically present to successfully run this activity. Criminal groups simply need people, a violent reputation and victims who fear them.

CHARACTERISTICS OF THE MEXICAN EXTORTION INDUSTRY

Since the extortion market is an illegal environment, it does not operate unilaterally and different situations may often arise. In Michoacan, for example, the quotas demanded from the avocado producers were fixed for everyone in the production chain: regardless of their size, non-exporting producers paid MXN$1,500 for every hectare cultivated each year. On the other hand, exporting producers paid MXN$3,000 for every hectare on a yearly basis.

When the Knight Templar Cartel started suffering increasing competition from rival organizations and local self-defense groups, they made their extortion demands even more stringent. They began asking for 10 cents more for each kilo of avocado (MXN$10 for every 100 kgs. or MXN$100 for every ton).

Protesters in Uruapan, Michoacan, one of the main avocado-producing areas, march for their disappeared relatives and friends

It is not exactly clear to what extent criminal groups facilitate extortion payments. Italian criminal organizations, for example, are known to apply a rationalistic method to their demands by offering some sort of deferred payment for the businesses that are unable to pay them. The use of accrued interests is common and we have discovered that in certain parts of Mexico this is used.

One of the businessmen interviewed for this report stated that the criminal group who extorted him (i.e. the Gulf Cartel) allowed them to extend their payment date if necessary. However, in doing so, the business suffered a 10% post-maturity interest.

There are also cases where the extortionist group does not allow any kind of late payment and react violently if their demands are not met on time. We cannot establish with absolute certainty why some organizations are minimally open to negotiation while others are not, but the fact that the same groups happen to behave in both ways at the same point in time while in different areas might suggest that their behavior is dependent on the control degree they exert over a certain area. The presence of rival criminal groups plays a role in their behavior.

It is also important to determine when criminal organizations become involved in extortion in the areas they operate in. Based on our studies, turfs where rival criminal groups compete in lead to higher extortion levels. Having two or more rival groups in a turf hinders the possibility of conducting the most lucrative activity: drug trafficking. To meet their daily expenses, criminal groups in these situations start looking around for easy and quick means of making money. Extortion is usually among the first options.

Based on our research, we discovered that not all extortions began when criminal groups started battling each other and security forces. A business owner from Tamaulipas that was interviewed for this report told Borderland Beat that they were extorted in early 2009 by cartel members under late Gulf Cartel kingpin Antonio Ezequiel Cardenas Guillen ("Tony Tormenta"). The split between the Gulf Cartel and its former paramilitary group, Los Zetas, happened the following year. Our interviewee said that the Gulf Cartel demanded MXN$2,000 on the first weekend of every month.

"[These guys] showed up at my business one morning ... and told me they were coming on behalf of 'Señor Tormenta'. They told us that we could call them if we ever needed anything or if someone ever stole, owed us money or was bothering us. We never did. I think [Tony Tormenta] and others knew that the Gulf/Zetas alliance was going to break apart sooner or later and were looking to make money some way or another", the business owner said.

One of the business owners interviewed by Borderland Beat was extorted by men claiming to work for Antonio Ezequiel Cardenas Guillen ("Tony Tormenta"); they believed the threats were legitimate

This incident demonstrates that Mexican drug cartels not only get involved in extortion during ongoing violence. They can get involved to affirm dominion over a certain area before violence erupts in order to secure incoming revenue and cover potential losses in the future.

One of the biggest problems that victims could face is the possibility of multilateral extortion. This happens when an area is contested by two or more rival organizations that are constantly fighting over resources. There is a chance that a certain business begins to be extorted by several groups at the same time. For example, the state of Guanajuato is currently the epicenter of a violent war between the Jalisco New Generation Cartel (CJNG) and the Santa Rosa de Lima Cartel (CSRL) over local illicit markets, mainly oil theft and drug distribution at the retail level.

Both organizations have started extorting local businesses in order to find resources to finance their cells and gain territorial control. In some cases, the contested zones are small and businesses get extorted by both criminal groups. Most of the times when a criminal group contacts a business for extortion purposes, they introduce themselves and say which cartel they represent and the local boss they work for.

For example, the business owners interviewed for this report were told very clearly who they were paying to and were also advised not to pay to any other group. Some of them told Borderland Beat that they knew of other businesses who had been extorted by Los Zetas and the Gulf Cartel concurrently. Some of these business owners were kidnapped or killed for refusing to pay and for paying a rival group. Others, the interviewees said, closed down their businesses overnight and fled. Multilateral extortion damages the victim twofold: business owners have to endure greater economic losses while at the same time risk retribution for paying a rival gang.

THE EFFECTS OF EXTORTION IN MEXICO

The effects of extortion in Mexican businesses vary greatly since there is not a unique extortion practice being applied uniformly in the country. One of the main effects of the extortion suffered by certain businesses in Mexico is the possibility of the quotas being so high that the business is unable to meet the requirements and in order not to suffer retribution they are forced to close down. This has happened in fiercely contested zones where each rival drug group is constantly looking around for resources and tries to drain the maximum possible from each extorted business.

For example, when cartel violence in Ciudad Juarez was at an all-time high between 2008 and 2012, the Juarez Cartel and its proxies battled with the invasive Sinaloa Cartel. Both groups relied heavily on street gangs such as Los Aztecas, Los Mexicles, and more than 500 other neighborhood gangs to attack rival zones. In their turfs, these gangs tried to extort nearly every business. As violence grew, so did the extortion demands. At some point they were too high for many businesses. By 2011, one business was shutting down in Ciudad Juarez every week due to high extortion rates.

In August 2019 in Guanajuato, tortilla markers in the town of Celaya went on strike demanding local authorities for protection against extortionists, particularly the CSRL. By this year, the CSRL was suffering losses in its war with the CJNG, and their leader José Antonio Yépez Ortiz ("El Marro") began increasing the extortion rates to make up for them.

Tortilleros were forced to pay an initial fee ranging between MXN$3,000 to $500,000 (approximately US$1,300 to $21,680) plus monthly quotas ranging from MXN$3,000 to $50,000 (approximately US$130 to $2,170). Two days after the strike, three women were gunned down at La Indita tortilla factory in Celaya. One of them had participated in the strikes.

Pictured above is the tortilla shop in question after the cartel's attack

The following month, a Ford Motors shop in Celaya was attacked by gunmen for failing to pay an extortion. The shop closed down a few days later under fears of future attacks. Over 80 employees lost their jobs overnight.

We must take into account that these dramatic results (i.e. businesses shutting down) do not always play out in this manner. As a matter of fact, certain industries can adapt very quickly and efficiently to organized crime extortion rackets. One of the best examples is the avocado industry in Michoacan. The avocado industry in Michoacan has suffered extortion since the 2000s but the industry has not declined as a result of it. In fact, avocado production has continued to grow every year since 2010 despite the violent turf wars between the CJNG and their rival groups in the area like Los Viagras, the Nueva Familia Michoacana and the Tepalcatepec Cartel.

One common observation in extortion studies is that extortion quotas lead to an increase in the prices of the products and services of the extorted businesses. Although this might be true in the case of small and medium-sized businesses, who may need to increase prices to cover for the extortion losses, this observation was not applicable to avocado industry. The steady price of Mexican avocado shows that extortion does not necessarily affect the price of a product or service.

For example, when the self-defense (autodefensa) groups in Michoacan started fighting the Knights Templar Cartel in 2013, the cartel increased its quota on avocado companies from US$1,300 to nearly US$2,800 per ton. Avocado prices fluctuated for years with no significant spikes or surges. In early 2016, avocado prices decreased to its original 2013 price. However, in mid-2016, the prices went up again and declined later that year. This occurred again between 2017 and 2019.

Extortion rates (in blue) compared to the price of avocado exports

The fluctuation of avocado prices shows that the classical "cost theory" of extortion – which assumes that extortion increases the prices of products and services of extorted business – is not necessarily factual. Avocado prices go up and down according to very well defined price cycles and are determined by factors like foreign demand and not local extortion rates.

For the avocado industry, extortion rates represent only a small portion of their fixed costs and were an "affordable" expense. For example, in 2013, the Knights Templar Cartel received an estimated MXN$119,400,00 (approximately US$5,188,228) from avocado extortions. This represents only 0.5% of the total value of avocado production that year. The available data also shows that the percentage of extortion money paid in relation to the avocado production growth actually decreased over time. In other words, the quotas demanded by extortionists were not fast enough to keep up with the industry's growth.

MIXING EXTORTION WITH ACCOUNTING

Businesses usually have two options:

1. Do everything by the book

In accounting, businesses report all income minus all legally deductible expenses. With this one gets earnings before tax. Taxes are calculated over this amount. Obviously, extortion payments are not legal deductible expenses, so the Mexican government will consider as if companies did not have that expense and will tax them over the income they had as if that expense did not exist. This is because the extortion expense does not have a factura (invoice). It needs to have an invoice to be deductible.

2. Conducting a "sketchy" process

In Mexico, companies being extorted can create a fake invoice through illegal shell companies. These illegal firms, known as Companies that Bill Simulated Operations (Empresas que Facturan Operaciones Simuladas, EFOS), create and sell fake invoices for companies. The individuals working for these firms are known as factureros, which derives from the Spanish word for invoice. With fake invoices, companies can then report the extortion as a deductible expense.

This activity is illegal and can be considered as borderline money laundering, but some business owners interviewed for this report told Borderland Beat that they see it as a "necessity" for their businesses to survive. If an extortion payment is too high, some business owners will resort to this illegal method. It is worth mentioning that many people and companies in Mexico still pay in cash. Since cash payments do not have an invoice, having an EFOS invoice helps reduce the high taxes when businesses report their earnings to the government.

Other interviewees said that they have mixed extortion into their accounting by putting together all their personal (non-business) expense invoices and tried to sum up to the extorted amount. They can then use this to make the extortion a deductible expense. Others interviewees said that they did not report some of their income received in cash and used that to pay the extortion. Since cash is not always reported, they would not have been taxed on it in the first place.

The factureros usually charge between 4% and 6% of the invoice amount companies request. For example, say a company had an expense of MXN$100,000 which does not have an invoice, and say they have to pay taxes on it. The tax can be as high as 30% (i.e. they need to pay the government MXN$30,000).

If companies make a fake invoice through the EFOS, they can deduct the full MXN$100,000 as a real expense and not pay taxes on it. They will just end up paying the factureros MXN$4,000 to $6,000 for doing the fake invoice.

CONCLUSION

In conclusion, Mexican extortion industry has increased dramatically since the beginning of the so-called drug war in 2006. Since that moment criminal groups have been highly involved in extortion not only as a mean of obtaining liquid revenue in the midst of an always-increasing competitive scenario, but as a mean of gaining territorial control through the use of coercion.

The practices of derecho/cobro de piso are varied and might vary according to the typologies of the conflict and the criminal groups operating in a certain area. Undoubtedly, extortion affects Mexican businesses, especially the small and medium-size ones which sometimes cannot fulfill the extortionists demands and must shut down their businesses or modify prices in order to remain competitive.

However, as established by this report, bigger industries oftentimes adapt to extortions and are not severely affected by them. In fact, organized crime groups are sometimes unable to adapt to changes in the market when large industries continue to grow every year.