Constellation Brands’ US$ 850 million investment plan for Mexico keeps ahead

3 August, 2018

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Constellation Brands, the NY-based producer and marketer of beer, wine and spirits, announced that neither the results of the last presidential election, nor the renegotiation of the North American Free Trade Agreement (NAFTA), have been grounds to modify its plans to invest US$ 850 million in the current fiscal year for the expansion its Mexican plants.

"It’s around US$ 850 million for this fiscal year according to the plan, important investments focused on three locations: Mexicali, Ciudad Obregon and Piedras Negras," said the firm's CEO for Mexico, Daniel Baima, in an interview with the state-owned news agency Notimex. “Such figure is additional to the more than US$ 4.5 billion the company has already invested in recent years.”

Last year the company made headlines after a series of protests over the construction of a new brewery in Mexicali, Baja California. However, the director revealed that they have approached members of the next federal government from whom it has already received the vote of confidence.

Baima explained that the plant is currently 44% completed and is expected to enter operations in three years. Once this brewery is in full operation, Constellation Brands will have a production capacity of 43.5 million hectoliters in the country.

In 2017 alone, the production of Constellation Brands was responsible for 22% of the beer produced in Mexico and 84% of the Mexican beer exports to the United States.

As part of an agreement for the acquisition of Grupo Modelo by Anheuser-Busch InBev, Constellation Brands was granted the rights to produce and market exclusively for the U.S. market the brands of the Mexican consortium, including the popular beer Corona.

According to Baima, the consumption of these brands in the United States grew 9% in the first six months of the year, a figure that far exceeds the growth of the beer market overall.

Regarding the renegotiation of NAFTA, the official was optimistic and expected it to conclude at the end of the year. However, he assured that aluminum tariffs have affected them a lot, even though only 20% of the product is offered in cans, while the rest is sold in bottle.

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