Barley producers from nine Mexican states continue their protests against Heineken Mexico, demanding a fair price for their crops. The sit-in at the Heineken plant in Palma Gorda, about 90 km northeast of Mexico City, has now entered its third day with no sign of resolution. Producers are frustrated by the brewery's refusal to honor the agreed price for the barley used in beer production.
The farmers, who have worked with Heineken for 40 years, are calling for a price of 8,430 pesos per ton (EUR 394 per t), similar to what Grupo Modelo offers. According to the farmers, this amount is even lower than the cost determined by FIRA (Fideicomisos Instituidos en Relación con la Agricultura), the national agricultural pricing body. However, Heineken has stuck to its offer of just 7,430 pesos per ton (EUR 347 per ton)—a price 1,200 pesos (EUR 56l per t) less than the agreed rate in 2022. In 2023, Heineken purchased 310,000 of the more than 600,000 tons of barley produced annually in the country for beer production. Currently, these are the quantities being held up.
The protest, which has also spread to other regions, has already seen access to the Heineken plant in Palma Gorda blocked by tractors. Farmers have threatened to extend the movement to seven additional states, including Veracruz, Nuevo León, State of Mexico, and Jalisco, if their demands are not met. Despite eight days of protests in Puebla and ongoing unrest in Hidalgo, Heineken has yet to engage with the producers to find a resolution.
Sabino Tapia Franco, one of the affected producers in Hidalgo, expressed his disappointment, stating that no Heineken executives have come forward to address their concerns. The farmers are scheduled to meet with company representatives later this week, but Tapia remains skeptical about the outcome.
"We are only asking for a 20% profit margin, even though the 2022 agreement granted us 25%," Tapia said. He emphasized that the current deal is unsustainable for farmers, as Heineken only considers the cost of one fumigation for the barley crops when, in reality, three fumigations are necessary, increasing production costs.
The ongoing dispute highlights broader issues in the barley market in Mexico, where Heineken and Grupo Modelo dominate the sector. Together, they control over 90% of the barley produced in the country, determining not only the varieties of barley grown but also the prices paid to farmers. Producers accuse both companies of violating trade agreements and engaging in unfair duopolistic practices.
Barley is grown in 11 states across the country, with the largest production concentrated in the Altiplano region, which includes Puebla, Hidalgo, Tlaxcala, and the State of Mexico. Around 40,000 producers and their families are involved, many of whom are currently being affected by the dispute with Heineken about the agreed-upon price.
The brewing industry in Mexico, heavily reliant on barley for beer production, is a major player in global agriculture. With beer being the country's most exported agricultural product, selling USD 16 million daily to over 180 countries, the demands of the barley producers are gaining international attention.
As the protests continue, producers are urging Heineken to honor the pricing methodology agreed upon with the Secretariat of Agriculture and Rural Development (Sader) in 2022, which was based on production costs, yield, and a fair profit margin. Without a resolution, the farmers warn, the future of Mexico's barley industry and the livelihoods of thousands of farming families remain at risk.
In Mexico, Heineken operates one malting plant in Ciudad de Rafael Lara Grajales, about 180km west of Mexico City, and another seven breweries. This includes the new brewery in Meoqui, which is Heineken’s largest greenfield brewery in the world with a capacity of 6 million hectoliters, inaugurated in February 2018 (inside.beer, 27.2.2018). In addition, Heineken has supported Malteurop in building a new 120,000-ton malthouse in close proximity to the new brewery, which was inaugurated last October (inside.beer, 19.10.2023)
