A battle between three major beverage makers and the federal government is threatening to cause a major beer shortage across Mexico.
Mexico’s three major beer companies – Constellation Brands, Anheiser-Bush InBev/Modelo and Heineken – are lobbying Mexico’s president to designate their production as essential, as he has for other agribusinesses. The governor of Jalisco, home to the city of Tequila where Mexico’s most favorite spirit is cultivated, is also pushing for an exemption.
It was unknown how long warehouses can continue to stock shelves with their products. But inventories are already being depleted, as panic buying has been reported throughout the country.
Heineken said on Friday that it will suspend production and distribution from its seven plants in Mexico because the government has deemed beer production a non-essential economic activity to contain the new coronavirus.
Dutch brewer which employs 16,000 workers, followed Grupo Modelo, which on Thursday announced similar measures.
In regard to production, Heineken will begin reducing its operations “to a minimum … with the sole purpose of avoiding irreversible effects that could make it impossible to reactivate our economic activity.”
Grupo Modelo said it will suspend beer production and marketing operations in Mexico beginning Sunday unless Mexico reclassifies beer production as economically essential.
The company has eight plants in Mexico, including one built in 2017 in Yucatan. It produces 46 brands, including Corona Extra, Corona Cero, Negra Modelo, Modelo Especial, Pacífico and Victoria. Modelo also imports Budweiser, Bud Light, Goose Island IPA and Stella Artois brands.
In a statement, the company indicated that it is in the process of reducing production at its plants to minimum capacity, but could guarantee the continued flow of beer if the federal government reverses a ruling that breweries are “non-essential.”
Modelo affirms that it is important to the agricultural industry and that tens of thousands of families depend on its sales. They also state that 40% of the income of 800,000 stores and grocers is from beer sales.