Mexico: Constellation Brands explores options of moving unfinished brewery

Constellations Brands, is considering to move its unfinished USD 1.5 billion brewery in Baja California’s capital Mexicali to a coastal zone in the same state where it can produce and use desalinated water to make beer, according to Governor Jaime Bonilla. The plant was almost 70% built with USD 900 million already invested in its construction, when 76.1 percent of the participants voted against the planned brewery in a public survey held in March 2020 (, 24.3.2020). Farmers in the region fought for years against the project and argued that it will use too much water in an area where water in general is a rare commodity (, 27.3.2017).

Baja California’s Governor prefers a location within his state to keep the investment and the 750 direct, permanent jobs related to the new site in the state. A location in the coastal zone could also be beneficial for the construction of a desalination plant in Playas de Rosarito which has long been among the governor’s top priorities for Baja California.

Also Constellation Brands is in favor of such a location, since Baja California “is ideally located near the U.S. state of California, Constellation’s largest beer market,” as the company said in a news release in 2016. The beer brands Corona, Modelo and Pacifico, which will be produced at the new plant, are exclusively for export to the United States.

However, Mexico’s president Lopez Obrador, who was born and raised up in Mexico’s south-eastern state of Tabasco, prefers to build the new brewery in this region. “70% of the country’s water is in the southeast,” the president said. Since Mexico’s South-East is more than 3,000 km away from the border to California such a location is unfavorable for logistical reasons and does not really seem a viable option for Constellation Brands.

“The company has a right to seek alternatives,” said Governor Bonilla, noting the President Obrador’s disapproval of a location in Baja California, as quoted by MexicoNow. He still hopes for a compromise, where Constellation Brands could finish its project in Mexicali and would build in exchange a desalination plant somewhere else in Baja California.

“We will continue working with local authorities, government officials and members of the community on next steps related to our brewery construction project in Mexicali and options elsewhere in Mexico,” said Bill Newlands, president and chief executive officer at Constellation Brands already in March in a media release. “In the meantime, it’s important to note that we have ample capacity, based on current growth forecasts and production capabilities at our Nava brewery and soon to be completed expansion in Obregon, to continue fueling the growth of our beer business in the medium-term. We’ve had a positive, mutually beneficial relationship with Mexico for more than 30 years and we fully expect this to continue.”

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