AB-InBev to brew Corona locally in select markets

Belgium | In a move akin to killing a holy cow, AB-InBev announced on 25 October 2019 that it was looking to produce its Mexican beer brand Corona in select markets, to increase availability and reduce its carbon footprint.

Reportedly, AB-InBev has already started brewing Corona in China. An analyst, quoted by just-drinks.com, says that local production of Corona could reduce AB-InBev’s cost of goods by between USD 18 and USD 24 per hl.

Corona ranks third among global premium beer brands by value, behind Budweiser and Heineken, but ahead of Guinness and Stella Artois. To date, it has only been produced in its home market of Mexico. AB-InBev holds the domestic and international licence for the brand, with Constellation Brands owning Corona in the United States. Constellation has expanded its production capacity in Mexico, since acquiring the rights to the beer from AB-InBev in 2012, as part of AB-InBev’s full acquisition of Grupo Modelo.

Already, AB-InBev produces some of its global brands in various markets: for example Budweiser in China, Stella Artois in Brazil, and Bud Light in Mexico. So why not Corona as well? Heineken has been brewing its eponymous brand in plenty of markets around the world for ages.

Mexico is the main beer exporter in the world, and has held this title since the beginning of this decade. In 2018, 39.5 million hl of beer (or 30 percent of national beer production) were sent abroad, an increase of almost 20 percent over 2017. Almost 80 percent of Mexican beer is destined for the EU, only 3 percent (1.2 million hl) for China. The bulk of this volume would be Corona.

However, between January and September this year, beer exports to China dropped to 975,000 hl, Mexican media say. This could be linked to AB-InBev having encountered shipping problems and deciding that local production would offer a way out.

For its part, Constellation Brands has no plans to produce Corona beer, as well as any of its other brands, outside of Mexico. “We are very proud to encourage and be part of the great beer culture in Mexico. This authenticity is part of the identity of our brands and is precisely what our consumers in the US love from our beer portfolio,” a spokesperson said.

But China is not the United States. Chinese punters may not be as pernickety as Americans, who object to see their favourite imports brewed domestically. For as long as the brands are aspirational and their price is right, the beers’ ultimate origin will not matter much.