With production stopped for domestic use, Mexico is running out of beer and people started smuggling beer from the United States and started selling it at black market prices. When the coronavirus pandemic reached Mexico, government stopped production of beer which was not deemed essential. However, while AB InBev and Heineken shut down their plants, Constellation Brands kept operating their two Mexican breweries for export to the United States (inside.beer, 3.4.2020).
Now, after one month has passed, stocks of beer have been depleted and the country is running dry. Oxxo, Mexico’s ubiquitous corner store chain, warned last Thursday that its beer supply would last just 10 days, prompting panic buying and long lines outside stores.
In addition a number of local governments have restricted or banned sales of alcoholic beverages.
The shortage has prompted people to smuggle beer into the country from neighboring countries like the USA. Customs regulations allow travelers to bring up to three liters of beer into the country. Mexican commuters which are still crossing U.S. borders every day although to a limited scale started to sell their imported and partly smuggled beers for black market prices which are about two to three times the normal price.
Ironically, some of the beer might even come from Mexico, because Constellation Brands is still allowed to produce and sell their beer for export to the United States. “We’ve had ongoing discussions with the Mexican government and continue to operate in compliance with the law,” said Michael McGrew, Senior Vice President, Corporate Communications at Constellation Brands.
The U.S. company bought distribution rights for Corona beer and other Mexican beer brands like Modelo and Pacifico in 2013 for roughly USD 5.3 billion from Anheuser-Busch after AB InBev got approval for its USD 20.1 billion takeover of Mexico's Grupo Modelo and had to comply with antitrust measures.