Is The Future Of Mexican Beer Suddenly In Jeopardy?

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Donald Trump winning the presidential election may have effects on the food and beverage industry, particularly the beer industry. On Wednesday, the Chicago Tribune reported shares of Constellation brand, which is the parent company of several Mexican import beers, plummeted post-election.

Election night probably saw an increase in consumption of comfort food and alcohol, but it seems like the industry was hungover after the final results came in (we’ve got puns for days!). Constellation Brands, parent company of Mexican import beers such as Corona and Modelo, saw their stocks dip by 7.6 percent. Trump’s rivalry with Mexico and his proposed immigration plans may be making some investors worried about what is next for the Mexican beer industry.

The worry over the future of Mexican beer is not exactly tied to the president-elect’s views on immigration. Trump has said he is looking to fortify the U.S.’ trade policies, with his first 100-day agenda including going after NAFTA and imposing tariffs. His plans could possibly result in Mexican beer brands paying export taxes, beer ingredients such as barley seeing a price increase, and, most importantly, beach dwellers possibly having to pay a little extra to get their Coronas.

Constellation Brands CEO Rob Sands said it is too early to tell how Trump’s policies could end up affecting the industry:

“It’s way too early to understand how (Trump’s) positions on Mexican trade and immigration will affect our business. We’ve all heard the campaign rhetoric and we all have our own thoughts on that. … But I don’t expect it to affect our business in the short term, and as new policies are presented, we will respond accordingly.”

Sands went on to say brands like Constellation have done their best to grow and fortify their business models over the year and the sudden panic may just be that. He said the election results may not affect the long-term sales of the Mexican beer industry:

“Mexico is obviously an important trade partner to the U.S. and we remain very optimistic that the new administration will want to maintain that trade relationship. … Each and every year, there are things said on the campaign trail that change once the candidate gets in office.”

People may have started hoarding their Coronas and Tecates overnight, but it still is too early to tell how Trump’s policies will end up affecting the the future of Mexican beer. Consumers may have to possibly hand over a few extra bucks for a six pack, but relations are still good with Mexico, so it’s not time to panic over what you’ll be drinking over spring break.

(Via Grub Street & Chicago Tribune & NPR)