Mexican Governor of Nuevo Leon hopes to secure Heineken’s investments

Mexico | Amidst the country’s water crisis, the President wants the Big Brewers to relocate to the south, but a northern Governor wants Heineken to stay.

Mexico’s water scarcity is a major concern now and for the future. President Lopez Obrador has said repeatedly that the country’s Big Brewers (foreign-owned AB-InBev, Constellation Brands, and Heineken) should relocate their production from the north to the south where there is abundant water.

The first to do so – unwillingly – was Constellation Brands. Eliciting popular support in a plebiscite in 2020, Mr Obrador forced Constellation to abandon the construction of a more than USD 1 billion brewery in Mexicali halfway through and shift the kit to the state of Veracruz in the south.

The President’s garbled announcements

He then announced in August last year that breweries in the north will no longer be granted water concessions. What could this mean? “Months after his announcement, it is still unclear if existing permits and concessions will be protected, and if the moratorium on water concessions will apply to all breweries, or only industrial ones,” the website goodbeerhunting.com argued on 12 January.

So far, the Big Brewers have not reported any cuts to their water supplies, unlike residents, which have experienced debilitating scarcities. Their ire is primarily directed at Heineken and Constellation, which brew on a massive scale. Heineken has an estimated annual capacity of over 30 million hl of beer, and Constellation over 39 million hl (2021).

What is more, 75 percent of Mexico’s beer exports are aimed for the United States. As locals see it, one of the country’s scarcest and most vital resources is being exported to the US in the form of beer, and to the monetary benefit of non-Mexican companies.

There are exceptions, though

But the president also knows which side his bread is buttered. Constellation has announced plans that it wants to expand its production sites in the northern state of Sonora. It said that the president has “expressed full support” for its growing operations.

Meanwhile, at the World Economic Forum (16-20 January) in Davos, Switzerland, the Governor of the northern state of Nuevo Leon, Samuel Garcia Sepulveda, met with Dolf van den Brink, CEO of Heineken. Mexican media report that they discussed investment in technology, productivity, and how to make the Heineken plant in Nuevo Leon the most efficient in Mexico.

Don’t pack up and leave

It seems like Mr Garcia Sepulveda would be loath to see Heineken depart for the south. Heineken has invested more than USD 1 billion in the state to increase and improve the company’s production and quality processes. The brewery employs more than 4,000 people, it was reported.

At the Monterrey plant in Nuevo Leon, which is said to be the oldest Heineken plant in Mexico, the company brews the Tecate, Tecate Light, XX Ámbar, and Indio brands, among others. Heineken indicated that it uses 2.3 l of water per 1 l of beer at the brewery, while the company’s average measure is 2.5 l of water per 1 l of beer.