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Organic Consumers Association

Agribiz Giant ADM Gets Taste of Hugo Chavez's Wrath

Longtime Grist readers might recall reading here about a Mexico-based transnational company called Gruma. I've written two articles (in 2006 and 2007) about how, after Mexico's privatization bonanza in the early '90s, this well-connected company managed to industrialize one of the world's greatest foodstuffs, the tortilla, strip it of its flavor and much of its nutrition, and gain a near-monopoly over its production in Mexico.

The company's canny owner, Roberto González Barrera, did so by using top-level political connections to manipulate policies designed to protect Mexican farmers and consumers. By the time he was done, those protections were gone -- and a tortilla empire had been launched. Enter U.S. agribusiness giant Archer Daniels Midland. As I wrote in 2006:

By 1996, Maseca had drawn the attention of Archer Daniels Midland, one of the world's largest corn brokers. Itself no stranger to government largesse, ADM spotted a good business model from across the border, and bought a 22 percent stake in GRUMA, Maseca's parent company. Today, ADM's formidable board chair G. Allen Andreas sits on GRUMA's board of directors, as does the company's CFO, Douglas J. Schmalz.

These days, Andreas no longer sits on Gruma's board, and he stepped down as ADM CEO a couple of years ago. But the companies remain tightly linked. Two ADM execs sit on Gruma's board, and ADM still holds that 22 percent stake.

Since the two companies became intertwined in 1996, Gruma has grown and diversified away from corn products. Although it remains the globe's largest producer of industrial corn flour and finished tortillas, it also deals in wheat flour and bread. And it has gone global. As Gruma's website puts it, "GRUMA is the indisputable worldwide leader in corn flour and tortilla production, with operations in United States Mexico, Mexico, Central America, Venezuela and more recently, Europe."

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