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Thinking of investing in an emerging market? Sit down, drink a large Porfidio Anejo-Extra and read this book before doing anything.
Chronicling an adventurous life of fun and love, pain and payback, comedy and karma, myth-buster Martin Grassl tells how he overcame political intrigue, greedy gringo brand rustlers, nationalist demagogues, a monopolistic Mexican mafia and reverse racists to make the world’s best tequila.
So why did he leave a cozy backwoods town in Austria and move to the Mexican Wild West to become a tequila maker? Why did the tequila mafia try so hard to finish him off?
This book answers those questions and more, including those that tequila drinkers and emerging market investors didn’t ask – but should. Why are there so many NOM numbers on tequila bottles - and do they really mean anything? Who is Profeco? How does Profeco, charged with protecting consumers, have the arbitrary Orwellian power to punish transgressions with no explicit charges or evidence let alone a hearing. Is the Tequila Regulatory Council regulating quality or enforcing a monopoly?
Tequilas claim assured quality and purity because they are made and bottled under "Mexican government supervision". Martin shows how corrupt and lazy tequileros get inspectors to ensure that mediocre and adulterated agave spirits can sell under impressive labels with government NOM numbers with only a tangential connection to where the stuff is made.
His rich life experience is the framework on which he elaborates a wider and deeper philosophy of life and business. His view is from inside the Jaw of the Beast; a no-holds-barred, hands-on analysis of why many developing countries are in a parallel economic universe to ours, a Through the Looking Glass dimension where anyone can be accused because a rival paid off cops or prosecutors and then are guilty until they can prove themselves innocent, where efficiency and innovation are crimes while hygiene is optional. Or where the Tequila cartel can try to trademark “agave,” as if Peru demanded sole ownership of “potato.” And where he was found guilty of... adultery!
In fact, the book show that his biggest crime was making a better tequila than his rivals, a blow to the pride of the resentful dons who dominated tequila. They insisted that tequila exports needed a permit, then refused to give him one. They conned the US into enforcing monopolistic Mexican permit regulations under NAFTA. They insisted his labels met made-up Mexican standards – which the US does not accept. They slapped arbitrary closure notices on his various premises, which is why he became Mexico’s “man of mystery” with multiple shadow offices and plants.
Like a Cold War operative, he had to throw off shadows, dodge attempted assassinations and kidnappings, and cope with arson attacks on his premises. When bullets failed, the character assassination campaign used “any insult in a storm.” They compared him with Maximilian, the Austrian Habsburg princeling France tried to impose on Mexico – while claiming he was related to the part-Indian dictator Porfirio Diaz.
You couldn’t make it up. When he opened an overt “Potemkin” distillery for tourists in Puerta Vallarta to draw attention away from his actual plant, he had a Mexican guardian General to fend off the local police. When his protector was transferred, the corrupt ruling party organized a “peasant” expropriation of his house and tourist center. He ruefully muses on his own stupidity now, since one of his major lessons for investors abroad is that having tangible property in a Third World country is offering a hostage to ill will and misfortune.
A cultural provocateur par excellence, he modestly attributes some of his success to the sheer dilatory ineptitude of the mercenary government agents who consistently showed up just too late.
To find out more about running a business in emerging markets and about tequila, read the book. A fascinating read for those with the curiosity and stamina to read hundreds of titillating pages to find the answers.

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