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News Article

Mexican Beer Chamber Looks for Answers

By Jan Hogewoning | Mon, 05/11/2020 - 09:34

In an interview last week with La Jornada, Karla Siqueiros, the recently appointed new director general of the National Chamber of Beer and Malt Makers (Cervezeros de Mexico), stated that the beer sector is not looking to meet with the government to see if the sector can reopen. She did assure, however, that when the moment comes, breweries will be ready to produce with minimal staff. Despite the shutting down of production by major brewers and the dry law that was instituted by the government two weeks ago, she reiterates that the chamber respects measures that guarantee the health of the population.

“The strength of the beer industry is in its value in the agro-industry, with beer representing 25 percent of all agro-industrial products,” said Siqueiros, hinting to the industry’s inconformity with not being considered an agricultural product by the government and therefore not an ‘essential’ industry. 

Essential industries have been allowed to carry on with their activities during the contingency. On April 3, a few days before suspending production, Grupo Modelo released a statement in which it commended the government for keeping agro-industrial activities running and also pointed out that “beer was one of the most important components of this industry.” On April 10, the Ministry of Agriculture and Rural Development (SADER) sent a letter to Cervezeros de Mexico stating that permission was granted for the beer sector to resume activities. However, in a baffling turn of events, Deputy Minister of Health Hugo López-Gatell immediately responded stating that this was an error and this would be reversed.

Karla Siqueiros describes the current situation, which has led to beer prices rising, as hurting the beer sector. According to industry figures, beermakers have been losing over US$400 million per month during this contingency. The beer sector value chain is estimated to employ 65,000 families in the country. The small groceries sector, which can earn up to 40 percent of revenue from beer sales, supports another 800,000 families. While reducing revenue has put pressure on the entire sector, beermakers themselves have not moved forward with layoffs.

In an interview last Wednesday with Milenio Television, the Attorney General for Consumer Protection Ricardo Sheffield stated that his agency estimates that production activities will be able to resume in mid- May. He pointed to the fact that “in many other countries, the beer sector, due to its wide value chain, has been considered an essential activity.” He also stated that he has not received any new indications from the government. Meanwhile, at the request of SADER, the beer sector has already purchased 180,000 tons of barley from producers for upcoming the autumn-winter harvest.

The data used in this article was sourced from:  
Efeagro, El Financiero, La Jornada, Mexico Business News
Photo by:   Flickr
Jan Hogewoning Jan Hogewoning Journalist and Industry Analyst