(Bloomberg) -- In Mexico, there is perhaps no more luxurious shopping experience than a stroll through one of El Palacio de Hierro’s 13 stores. At the Perisur location, an undulating, tempered-glass structure on the southern edge of Mexico City, customers can take home a $2,400 handmade Bottega Veneta purse or a $25,535 Bell & Ross men’s sapphire-crystal watch.
The chain is owned by Alberto Bailleres, Mexico’s second-richest man. This wealth -- nearly $11 billion, according to Bloomberg estimates -- has put him in the crosshairs of Andres Manuel Lopez Obrador, the fiery leftist presidential candidate. To Lopez Obrador, Bailleres forms part of the Mexican “mafia of power” that needs to be reined in.
It’s an unnerving message for Palacio de Hierro executives, especially because Lopez Obrador has opened up an 18-point lead over his nearest rival just one month before the vote. So on a recent weekday evening, they gathered Perisur staff in the mess hall for a mandatory meeting. Over the next 40 minutes, they hammered home the message again and again, according to employees present that night: Vote for whichever candidate has the best shot at beating Lopez Obrador; it’s the best chance we have of preserving the economic system that allows us to employ you.
These kinds of tactics are suddenly becoming commonplace across Mexico. Supermarket chain Grupo Comercial Chedraui, mining giant Grupo Mexico SAB, cinema operator Cinepolis de Mexico SA, airline Grupo Aeromexico SAB -- all have begun to nudge their employees in one form or another to think carefully about who they vote for on July 1. Nothing more clearly underscores how rattled corporate Mexico is about the prospect of a Lopez Obrador victory and how high executives believe the stakes are.
“Businessmen are very worried, their posture is very clear,” said Alejandro Schtulmann, who runs political-risk consultancy Empra in Mexico City. “Lopez Obrador hasn’t kept his feelings to himself, and his discourse generates great uncertainty about the economic model that he’s going to follow.”
There’s nothing necessarily illegal about the conversations. Experts say that while unseemly and heavy-handed, they fall into a “gray zone” as long as there’s no actual coercion. And yet there’s also no clear evidence they will be effective. The tack could even backfire. In a phenomenon similar to how Donald Trump’s supporters seemed more determined to vote for him in 2016 the more they were urged by public figures to reconsider, some workers in Mexico said they were put off by the lectures -- and that they are not going to be dissuaded from voting for Lopez Obrador.
“It’s not fair,” said one Palacio de Hierro worker, who like the others, asked not to be identified out of concern that he could be fired for discussing the matter publicly. “They want to create fear.”
At least three Palacio de Hierro locations held election conversations with employees. At Perisur, the meetings were staggered over three nights. Workers -- some of whom earn as little as $300 a month (or about one-eighth the cost of that Bottega Veneta purse) -- were ordered to attend one of them.
The presentations included a six-minute election video created by ConcienciaMX, a group funded in part by the country’s three main business chambers. The video’s main message: You, and Mexico more broadly, are not as bad off as you think. Wages and purchasing power have risen in recent decades, utility services are better, overseas trade is booming and together, we can continue to improve Mexican society. “Inform yourself and reflect before voting,” the narrator says toward the end of the video as a graphic urges viewers not to cast a vote “out of anger.”
Palacio de Hierro said in a statement that it’s “involved in ConcienciaMX’s independent movement to form a better country through the empowerment of Mexicans. The initiative involves various efforts to promote citizen participation and the free and secret vote, which is in agreement with our philosophy. At no time are we influencing the vote, or presenting proposals in favor or against any one candidate or party.”
The company denied that it sought to push its employees to vote one way or the other. “El Palacio de Hierro fully respects political preferences and reiterates its political neutrality,” it said.
‘What Is Populism?’
Election material has also been on display at Chedraui grocery stores.
Posters posing the questions “What Is Democracy?” and “What Is Populism?” were hung up in workers’ rest areas. The posters go on to explain how Cuba and Venezuela are the region’s only countries that don’t hold free, democratic votes.
These are thinly veiled references to common lines that Lopez Obrador’s opponents use against him: that he’s a populist just like Hugo Chavez who’ll sink Mexico into the same kind of poverty and authoritarian rule that’s ravaged those two countries. Lopez Obrador, while pledging to subsidize small farmers and halt the opening up of the oil industry, says he’ll be a market-friendly president who has no intention of expropriating private businesses. His campaign declined to comment on the companies’ election tactics.
Chedraui confirmed its use of the posters, saying they’re part of a broader campaign that seeks to lawfully inform employees about the importance of the election.
The tactics may be legal, said Javier Martin, an associate professor at research center CIDE in Mexico City, but that doesn’t make them right. Companies “should know they’re in a privileged position and should be more careful,” he said. “It’s not a relationship between equals.”
©2018 Bloomberg L.P.