Mexican authorities on Thursday arrested the mayor of the municipality of Tequila, birthplace of the agave spirit, for allegedly extorting major distillers in collusion with the Jalisco New Generation Cartel (CJNG).

The case exposed the dangers firms face when operating in Mexico, particularly in the tourist and industrial hub that props up a multi-billion-dollar sector but is also plagued by cartel violence.

Authorities said Mayor Diego Rivera was detained during federal raids alongside the town’s security director and the heads of public works and the land registry. The group led a corruption ring that targeted beer and tequila producers in the municipality, Security Minister Omar Garcia Harfuch said.

The world’s largest tequila producer, Becle, was targeted by their scheme, investigators said in December. The Jose Cuervo producer filed a complaint accusing the mayor’s administration of imposing an exorbitant property tax up to 20 times the legal rate and a fine of more than 60 million pesos ($3.45 million) while withholding permits and attempting to shutter one of its plants.

State authorities intervened, with the Jalisco governor saying at least 10 companies had filed complaints against the local administration.

Becle did not immediately respond to a request for comment. The Tequila Regulatory Council said it did not have a position on the matter.

Officials allege Rivera’s network was not only extorting businesses but also diverting public funds and collaborating with the CJNG, one of Mexico’s most powerful and violent criminal organizations.

Rivera had previously drawn scrutiny after a local concert featured projected images of the cartel’s fugitive leader, Nemesio Oseguera “El Mencho.”

($1 = 17.3993 Mexican pesos)

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(Reporting by Lizabeth Diaz and Natalia Siniawski; Editing by Rod Nickel)