News At the Mexican border, a battle over beer, water and a way of life

Discussion in 'Beer News & Releases' started by Smakawhat, Dec 7, 2017.

  1. Smakawhat

    Smakawhat Poo-Bah (6,622) Mar 18, 2008 Maryland

    From Palm Springs CA - Desert sun newspaper.

    MEXICALI, Mexico — It was around 3 a.m. when Filiberto Sanchez snuck onto the property of a huge brewery under construction, hopped three fences and scaled a construction crane.

    At the top, he hung a Mexican flag and a sign that read in Spanish: "Get out of here, Constellation!"

    He remained there for three days in November with no food, he said, in protest of United States-based Constellation Brands' new facility, which will produce popular Mexican beers like Corona, Negra Modelo and Pacifico.

    Link below to full article.
    Ranbot and thebeers like this.
  2. Squire

    Squire Poo-Bah (1,977) Jul 16, 2015 Mississippi
    Premium Trader

    I must say I admire his tenacity but three days without a beer is nuts.
  3. TrojanRB

    TrojanRB Meyvn (1,162) Jul 27, 2013 California
    Premium Trader


    Meaningless article...I won’t even call it journalism.
    PatrickCT and VABA like this.
  4. Zorro

    Zorro Poo-Bah (4,267) Dec 25, 2003 California

    The Beer is a Corona, and they were completely out of limes or Tequila to cover up the taste.
    beertunes likes this.
  5. donspublic

    donspublic Poo-Bah (1,572) Aug 4, 2014 Texas
    Premium Trader

    That plant will employ workers from Mexico to make beer that will be sold in the states. So not sure I get what he was protesting. I would welcome any company to come into the US and employ US workers regardless of where the product went. Go figure
    PatrickCT and Squire like this.
  6. readyski

    readyski Aspirant (224) Jun 4, 2005 California

    I think the water issue is just a ploy. What he really wants is a decent craft brewery to be there :wink:
    thebeers likes this.
  7. Squire

    Squire Poo-Bah (1,977) Jul 16, 2015 Mississippi
    Premium Trader

    I think he did it to impress a girl.
  8. thebeers

    thebeers Poo-Bah (2,163) Sep 10, 2014 Pennsylvania
    Premium Trader

    He's a farmer. He and other farmers in the region are worried about the less-and-less water available to irrigate their crops. The new brewery would use a lot of water. They're saying the water should go to farmers who've been their for generations before a foreign company making beer for people in another country.

    Two solutions offered in the article are either for the plant to be built in the US and use Californians increasingly limited water, or for the company to invest in water recycling technologies for the community so that farmers can get by using less.
    Raj, tone77, donspublic and 6 others like this.
  9. jesskidden

    jesskidden Meyvn (1,325) Aug 10, 2005 New Jersey

    This is kinda funny - somehow the brewery owners of the world's largest and best known brands, like Budweiser, Guinness, Heineken, Carlsberg (and Tuborg), Becks, Pilsner Urquell, Bass, Molson, Coors, Fosters, Miller, etc., have no problem brewing their beer anywhere in the country or the world - or even having other brewers brew it under license or by contract in countries far beyond the beers' original homes---
    but the AAL's Corona and Modelo Especial "heritage" demands respect and "must" be brewed only in Mexico. :rolling_eyes:

    If I recall, NAB implied the same thing when they did a similar US rights deal for the "Labatt" brand w/ABInBev, noting, as well, that their wholesalers demanded the flagship beer continue to be brewed in Canada - which, of course, is now done by arch-rival Molson for the US market (even as several of the Molson beers sold in the US are brewed in the US at their subsidiary MillerCoors facilities).

    I don't know, are Mexican Macro consumers in the US any more loyal or origin-conscious than all those other macro drinkers of international brands?

    I think too many marketers in the US "learned" the lesson of "1970-90s Miller's Lowenbrau" - hell, it probably contributed to ABI's apparently dropping the German-brewed beer from their US import portfolio - but the examples noted above seem to suggest Lowenbrau was the long-ago exception not the rule in the US market.
  10. hopfenunmaltz

    hopfenunmaltz Meyvn (1,378) Jun 8, 2005 Michigan

    The Colorado River no longer flows to the Gulf of Cortez, as it is all used for irrigation. No water would go past the border if there wasn’t a treaty that guarantees the allotment for Mexico. I would say the farmers have valid concerns.
    stevesbeer, 66jzmstr, rgordon and 6 others like this.
  11. thebeers

    thebeers Poo-Bah (2,163) Sep 10, 2014 Pennsylvania
    Premium Trader

    Mexico just raised its minimum wage to $4.57/day in US dollars. The company talks about wanting the plant to be close to Californian consumers. I'm sure the decision to build it in Mexico rather than California has nothing to do with the wage differential (nor things like water regulations), but their shared respect for Mexican heritage. :rolling_eyes:
  12. drtth

    drtth Poo-Bah (3,568) Nov 25, 2007 Pennsylvania

    All true, but it may well be that AB having to come up with 20 Million to settle a lawsuit over brewing Becks in the US while projecting the image of a German brewed brand.
    FBarber likes this.
  13. Squire

    Squire Poo-Bah (1,977) Jul 16, 2015 Mississippi
    Premium Trader

    I understand brewers such as New Belgium are in the forefront of this technology extracting from their waste water livestock feed and methane gas which is piped back into the plant to be used in the brewing process. I expect Constellation can afford to treat the waste water sufficiently to be used for agricultural purposes.
    stevesbeer, FBarber and drtth like this.
  14. AZBeerDude72

    AZBeerDude72 Meyvn (1,316) Jun 10, 2016 Arizona
    Premium Trader

    A true craft beer fan protesting big beer :stuck_out_tongue:
    thebeers likes this.
  15. jesskidden

    jesskidden Meyvn (1,325) Aug 10, 2005 New Jersey

    Yeah, the lower labor cost in Mexico is nice icing for Constellation but labor is a relatively tiny percentage of the final cost of a beer brewed in those of automated, efficient multi-million barrel macro breweries where they crank out around 10,000 bbl/employee. MC and AB can pay ~$30/hour ("$70 per hour in total compensation – wages, health, welfare and pension benefits" for AB workers as the Teamsters note) and still sell their "economy-priced" brands for $12-15/case or about half of Corona's retail price.

    That suit was about labeling, not origin of the actual product. Texas-brewed Fosters, Canadian-brewed Guinness and Carlsberg, NY-brewed Bass, Dutch-brewed Murphy's, Ohio-brewed Molson, etc., all sell in the US without legal problems and if Constellation were to built a US-brewery (however unlikely that would be) I'm sure their legal department would review the labeling with that Beck's case in mind.

    It was a pretty easy fix, after all (a little extra black ink):
    Ranbot and FBarber like this.
  16. drtth

    drtth Poo-Bah (3,568) Nov 25, 2007 Pennsylvania

    Yes, it was about labeling. Now what labeling/brand identity problems are created if some of the beer is brewed in Mexico and some in the US. What happens to the pricing structure of an “imported” beer when some is and some is not?

    Part of their branding currently is that the beer is brewed in Mexico. What happens to their image if some is US brewed.

    These things all get counted in a balance sheet.
  17. thebeers

    thebeers Poo-Bah (2,163) Sep 10, 2014 Pennsylvania
    Premium Trader

    I have no doubt that Corona and a gazillion other products could be made profitably in the United States, but that alone rarely stops big companies if they can make things more profitably abroad.

    I have no idea what taxes, water and electricity costs, shipping costs, etc, are for this company 20 miles south of the border versus 20 miles north of it, but just doing some back of the envelope calculations on labor costs...

    Assuming they'd be paying $70/hour in total costs for a worker in the US, and, what, $3/hour in Mexico, for what I think was 750 people mentioned in the article. That's over $100 million difference each year. Maybe I'm off and it's only $50 million. Whatever. It's certainly not the only factor in deciding where to locate, but it's not an insignificant one.
  18. Ranbot

    Ranbot Zealot (536) Nov 27, 2006 Pennsylvania

    They also suggested extending the local municipal water infrastructure to the industrial sector where Constellation's new brewery is being built, which might also have advantages for Constellation or other surrounding businesses in the industrial sector. I'm actually surprised an industrial park would not have a public water supply.

    The branding might be even more important as Latino populations in the US continue to grow. Also, I think it's safe to say that US Latinos from Mexico or otherwise tend have stronger, more recent connections to their heritage (e.g. 1st, 2nd, or 3rd generation), than most Americans descended from Europe whose connections to their heritage is more distant (commonly 3rd generation or further, and probably a greater mix of ancestry). The major European immigration waves to the US occurred in the 1800's and early 1900's, whereas Latino immigration waves increased sometime after 1950 and continue today. All American's like to tout their heritage, but the allegiances to the "home" country can feel very different to different generations. So, I think it's very possible that the experience brewers had with branding European in the US might not be comparable to Mexican/Latin American beer branding now.

    Although, maybe I am projecting some here from some personal experiences... I have a German last name that I can trace to when they immigrated to the US in the late 1700's, and some Irish from my mother's side traced to the mid-1800's, which is all interesting, but knowledge of that heritage is not guiding and decisions in my life, beer purchases or otherwise. My wife's family is Italian, trace their US immigration to 1920's I think, but I've never seen any of them with a Peroni (they tend to favor Yuengling or wine). An anecdotal observation from a time when for my job I had to inspect residences in a predominantly Latino neighborhood. Many of the owners of the residences had some beer stored in their home, just like anyone else might, except nearly all the beer I saw was Mexican brands (Corona, Tecate, Sol, Dos Equis, Modelo, etc.) There was clearly a strong preference that I suspect is not as prevalent among European descended Americans for European beer.

    Lower labor costs and less regulations in Mexico is a boon for Constellation too of course, but I wouldn't completely discount the Mexican-made branding either.
    #18 Ranbot, Dec 7, 2017
    Last edited: Dec 7, 2017
    El_Guapo, surfcaster and drtth like this.
  19. donspublic

    donspublic Poo-Bah (1,572) Aug 4, 2014 Texas
    Premium Trader

    Having a daughter who worked on the expansion of the Nava plant, I don't think they are paying the people that run that plant minimum wage. They are very talented and knowledgeable people. The breweries that Constellation are running in Mexico are cutting edge and require quite a bit of knowledge to run and manage them
    PatrickCT and thebeers like this.
  20. thebeers

    thebeers Poo-Bah (2,163) Sep 10, 2014 Pennsylvania
    Premium Trader

    I don't doubt it. By point of comparison though, BMW opened a new $1 billion plant in Mexico this year, which undoubtedly also requires skilled workers. The starting wages, according to Bloomberg, are between $1.10 and $2.53 per hour. Way more than minimum wage, but way less than someone in California would be paid for the same exact work.
  21. jmasher85

    jmasher85 Zealot (559) Mar 27, 2015 Maryland

    drtth and thebeers like this.