In order to improve the sector's production management and guarantee safe pork trade, the Guatemalan government is moving forward with the implementation of the Official Pork Traceability Program.
The program, which is being implemented by the Ministry of Agriculture, Livestock and Food (Maga), consists of placing radiofrequency button-type and flag-type devices for breeding animals.
As a result of the restrictions on mobility and the ban on the sale of alcoholic beverages, which were decreed in 2020 to mitigate the outbreak of covid-19, it is estimated that the smuggling of liquor from Mexico into the Guatemalan market increased considerably.
According to the report Prohibitions, illicit alcohol and lessons to be learned from the covid-19 lockdown, prepared by the Transnational Alliance to Combat Illicit Trade (Tracit), the dry law imposed for long periods boosted sales of smuggled alcoholic beverages.
Given the crisis in the region, businessmen in Guatemala report that smuggling of Mexican products has increased, while in Panama, beer producers attribute the rise in illegal trade in alcoholic beverages to the dry law.
With the spread of Covid-19, governments in Central America have decreed mandatory quarantines and have also restricted the movement of consumers at certain hours.
Because the current legal framework is ineffective, Guatemalan entrepreneurs in the food sector are asking the government to draft a new law that would criminalize smuggling and also consider it a matter of national security.
Directives of the Guatemalan Chamber of Food and Beverages (CGAB) assure that the current Decree 58-90 "Law Against Fraud and Contraband" is obsolete and does not allow for direct and frontal combat against contraband.
As a result of the operations carried out by the Superintendence of Tax Administration to stop smuggling, in recent days there have been two attacks on the customs area of Tecún Umán I, on the border between Guatemala and Mexico.
According to information provided by the Guatemalan authorities, on November 13 and 17, groups of alleged smugglers attacked the customs of Tecún Umán I in San Marcos, because in the operations deployed by the tax authority, merchandise was seized that was not declared upon entry into the country.
Agricultural producers report that the smuggling of corn from Mexico has increased in recent years, and it is estimated that currently the consumption of grain entering illegally accounts for 25% of total demand.
According to farmers, smuggled corn competes unfairly with local production, since in Mexico producers enjoy tax exemptions and state subsidies.
In Guatemala, food and beverage businessmen estimate that product smuggling during the end of 2018 will increase more than reported in previous years.
Complaints by Guatemalan businessmen regarding the illicit marketing of different types of products have been a constant in recent years. Long-standing calculations detail that of every ten products sold in the country, three are of illegal origin.
The agricultural chemical union of Guatemala states that the illicit commercialization of fertilizers, insecticides and fungicides, represents about 12% of the local market.
According to reports from the Association of the Agricultural Chemical Guild (Agrequima), between August 2016 and the same month in 2018, a investigation of agrochemical packaging was carried out in the union's collection centers, in which several products were identified which did not possess the minimum quality requirements.
In the view of businessmen in Guatemala, the country has become a connection center for merchandise that is transported illegally from the Colon Free Zone, in Panama, to the Corozal Free Zone, in Belize.
Within the to and fro of contraband products moving from the south of Central America on the route to Mexico, a significant amount stays in Guatemala, where criminal structures are responsible for "marketing" these products throughout the territory.
The union of Guatemalan industrialists will propose a development agenda, with the aim of improving economic conditions and recovering some of the investment lost in recent years.
The impact of illicit trade in Guatemala is such that "in the case of the paper industry, smuggling has grown to the point of taking away a portion of the market from companies and 30% of their turnover."
Guatemalan businessmen say that out of every ten products sold in the country, three are of illegal origin.The impact of illicit trade on business activity can already be seen in the turnover of companies, who are also forced to reduce their employee payrolls.
Guatemalan businessmen are demanding stricter laws to combat the illegal entry of goods from Mexico, which are now being sold in El Salvador and Honduras.
Food and beverage companies say that in the municipality of Acajutla, El Salvador, it is possible to buy oil, flour and crackers that were illegally smuggled in from Mexico, first passing through Guatemalan territory, and eventually being sold on Salvadoran soil.
Local manufacturers are demanding better controls on the illegal entry of shoes, which on top of the breach in labeling rules by some traders, is harming the sector.
Local shoemakers claim that non-compliance with the labeling standard on shoes sold in some stores results in sales made at very low prices, generating unfair competition, which, combined with smuggling, is having a negative effect on the sector.
It has been estimated that the alcoholic beverage industry has lost out on earnings of $92 million in annual sales due to the entry of illegal and fake products.
While the sector failed to earn about $92 million, according to estimates Euromonitor reported by Prensalibre.com, the Guatemalan treasury has forgone about $25 million in uncollected taxes.
It is estimated that in 2015 illicit trade and customs fraud added up to $2.2 billion, equivalent to 3.5% of GDP.
Cereals, animals, meat and meat products, bakery products, sugar, macaroni and noodles, dairy, alcoholic beverages and textiles topped the list of products most affected by illegal trade, according to a study by ASIES.