The coronavirus pandemic which has reached now Mexico has stopped production of Corona beer as well - but not all. While GrupoModelo, which is part of AB InBev announced to temporarily cease production of all its beers including Corona, Constellation Brands that produces Corona beer for the United States declared that its two breweries in Mexico are still running.
Grupo Modelo announced to scale down production at its 11 breweries in Mexico and to totally stop it from Sunday in order to comply with directions issued by the Mexican government which declared this week a health emergency and ordered the suspension of all non-essential activities until April 30. “If the federal government considers it appropriate to issue some clarification confirming beer as an agro-industrial product, at Grupo Modelo we are ready to execute a plan with more than 75% of our staff working from home and at the same time guaranteeing the supply of beer,” the company said in an announcement.
However, AB InBev will also take advantage of the fact that license production of its iconic Mexican beer has already started or is going to start soon in countries like China, Brazil, Colombia, Belgium and the UK (inside.beer, 5.11.2019). The shortfall in production of Corona beer in Mexico can be at least partly upset by increasing the production in other parts of the world.
In contrast to AB InBev, that is shutting down production in Mexico, Constellation Brand’s CEO Bill Newlands confirmed on a conference call with analysts on Friday, that its breweries in Nava and Obregon in Mexico are still running. "I have no comment regarding a competitor and what they are choosing to do or not choosing to do... What I would say is, today... we are operating," Newlands was quoted by Reuters.
The anomalous situation that one company producing Corona beer suspends production while the other one in the same country is still running stems from the fact that Grupo Modelo had to sell the distribution rights of its Mexican beer range including Corona and Modelo beers to satisfy antitrust concerns after AB InBev got approval for its USD 20.1 billion takeover of Mexico's Grupo Modelo . Buyer was Constellation Brands, which at that time was mainly active in the wine sector.
Corona's coincidental name with the virus hasn't hurt sales. On the contrary, it seems that people make fun of the homonymy and buy beer for that very reason. Before the enforced shutdown of social life many countries reported so-called corona parties where young people gathered together to drink Corona beer and defy the risks associated with the virus.
Sales of Constellation’ beers, namely of Corona and Modelo, rose in the first three months of this year 8.9%. Especially the first three weeks of March showed increased sales of 24% compared to last year.
