Mexican authorities have arrested Diego Rivera, the mayor of Tequila, for allegedly colluding with the Jalisco New Generation Cartel (CJNG). Rivera is accused of extorting major tequila distillers, highlighting the risks businesses face in Mexico's cartel-ridden areas. The arrest follows federal raids targeting Rivera and other municipal officials, exposing a corruption ring that targeted both beer and tequila producers.

The investigation revealed that Rivera's network imposed exorbitant property taxes and fines, withholding permits to shut down production. Becle, the world's largest tequila producer (Jose Cuervo), filed a complaint, alleging the mayor's administration demanded over $3.45 million. State authorities intervened after at least 10 companies complained, underscoring the severity of the situation.

Officials claim Rivera's network diverted public funds and collaborated with CJNG, one of Mexico's most powerful criminal organizations. Rivera had previously faced scrutiny after a local concert displayed images of the cartel's fugitive leader. This case underscores the complex relationship between local governments and criminal groups in Mexico.

The arrest sends a message to the tequila industry while raising concerns about the security of businesses operating in Mexico. The Tequila Regulatory Council has not commented. Investors should monitor the impact on tequila production and potential shifts in the industry's operating environment due to the ongoing investigation and legal proceedings.