The Mexican film industry has responded angrily to news that MPAA chief Jack Valenti wrote to Mexico's President Vicente Fox warning that the one peso levy on admissions may jeopardise Hollywood's investments in local cinema ( Feb10).

An open letter to President Fox, signed by producers, directors, actors and other film professionals and led by producer Jorge Sanchez and actress Maria Rojo, urged Fox not to give in to Valenti's 'threats.'

They reminded him that Hollywood product replicated its worldwide dominance of local box offices in Mexico, occupying up to 90% of its theatres.

"Under these circumstances, any support to national cinema, such as the peso levy on admissions which bothers Mr. Valenti so much, is vital for its survival" the letter stated.

The one peso (10 cents) tax on box office will bring in at least $13.8m (Pesos 150m) to the coffers of state-backed film institute Imcine, which will administer the fund.

Introduced in January, the initiative comes at a time when film production in Mexico has slowed, despite the international success of Y Tu Mama Tambien, Amores Perros and El Crimen Del Padre Amaro.

In recent years, the majors have been increasing their support of local cinema in Mexico. Warner Bros, Fox, Columbia TriStar and Disney have been actively distributing local films. Disney, through its joint venture with Spain's Admira, Miravista, recently started principal photography of its first Mexican production, Ladies' Night. Warner Bros has been co-producing films through its joint venture with Televisa film arm Videocine, Coyoacan Films.

Columbia TriStar boarded its first Mexican project Sin Ton Ni Sonia and distributed the highest-grossing Mexican film of all time, El Crimen Del Padre Amaro last year.