Mexico: Constellation Brands’ new US$1.5 billion brewery is hanging by a thread

The completion of Constellation Brands’ new US$1.5 billion brewery in Mexicali, Mexico, is hanging by a thread after a petition for a public vote on its construction was accepted for consideration by the Baja California State Senate. A civil organization had filed a request for the plebiscite on December 9 to gauge public opinion on the brewery which is said to use too much water in an area where water in general is a rare commodity.

Constellation Brands has meanwhile filed a legal challenge with the state electoral authorities against the decision. The legal body will now have time until the end of March to review the decision but a ruling is expected much earlier.

A possible vote on the completion of the brewery could take part in June and could cost Constellation Brands as much as US$700 million worth of investment. Then brewery which will be partly completed by June would have to be dismantled and transferred to another location.

Constellation VP and spokesman Julio Portales warned the authorities about the external impact of such a decision: “If on June 1 the citizens vote that we move, imagine the signal we are sending to the world, to all the investors on the planet: that in Mexico your investment can be put to a vote . . .”

When farmer’s protests came up the first time in March last year, Edgar Guillaumin, Constellation’s vice president for external affairs in Mexico, said that he did not understand the protests: “We have been in a long conversation with the state government about how the city could provide water. The message is very clear: The city has enough water to provide to us.” The brewery stresses the fact that the Mexicali site was chosen because of the valley’s plentiful water and its proximity to the US-border. In addition, once at full capacity the brewery will only need 7 million cubic meters of water a year, which is less than 1% of the valley’s water supply. (inside.beer, 27.3.2017)

 

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