Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Mexican tequila makers, unlike brewers, plan to keep up production, exports

Published 04/04/2020, 20:32
Updated 04/04/2020, 20:35
© Reuters. FILE PHOTO: Blue agave hearts are pictured on top of a truck on the outskirts of Tequila

By Adriana Barrera

MEXICO CITY (Reuters) - Mexican tequila makers have sought to dispel concerns that their exports to the United States will dry up, after two large brewers in the country suspended production to comply with government rules put in place due to the new coronavirus.

"Neither in the United States nor in Canada are there restrictions on manufacturing and selling alcoholic beverages," the president of the Mexican tequila chamber, Rodolfo Gonzalez, said in an interview.

This week, Heineken (AS:HEIO) and Grupo Modelo both said they would halt production in Mexico after the government declared a health emergency and ordered suspension of non-essential economic activity.

It caused a storm on social media and large lines in some local supermarkets as Mexicans sought to stock up on beer.

Mexican tequila makers, however, interpret the newly imposed rules differently.

Gonzalez said the sector was still expecting growth rates of between 4% and 5% for this year - even as the new coronavirus is denting sales to bars, restaurants and hotels worldwide.

The United States and Canada are the largest export markets for the emblematic Mexican alcoholic beverage, with the chamber reporting about $2 billion in sales revenues across 118 countries every year.

Gonzalez said the labor-intensive harvest of the prized agave plant would continue because agricultural production is considered an essential economic activity, even if the production of alcoholic beverages is not.

Gonzalez said stopping crop production would have severe consequences for tequila makers.

© Reuters. FILE PHOTO: Blue agave hearts are pictured on top of a truck on the outskirts of Tequila

"We have to finish planting all the agave for the 2020 cycle by next month," Gonzalez added. "If we were to suspend our activities it would cause irreversible damage."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.