Mexico’s leader has called for an end to brewing in the country’s drought-stricken north, gutting the business model of making spirits with water drawn from shrinking aquifers to quench thirst on the other side of the US-Mexico border. He called on brewers to produce their beer in the water-rich south and offered his “full support” to those who did. “This does not mean that we will not produce any more beer, it means that no beer will be produced in the north,” López Obrador said on Monday. Mexico has become one of the world’s biggest beer exporters over the past decade thanks to the popularity of brands such as Corona, Modelo and Dos Equis. The country exported nearly $5 billion worth of beer in 2019, according to state statistics agency INEGI, about 94 percent of that to the US. However, northern Mexico, home to a number of major breweries operated by Constellation Brands, AB InBev and Heineken, among others, has been hit by one of the worst droughts in recent memory. The National Water Commission (Conagua) said 41 percent of Mexico is now in drought, up from less than a quarter this time last year. Gonzalo Hatch Kuri, professor of geography at the National Autonomous University of Mexico, said: “All the rain now during the rainy season falls in one or two days. And during the dry season it is very difficult drought conditions.” Around the northern industrial city of Monterey, reservoirs have evaporated and taps have run dry, forcing some residents to wait in line with buckets for tankers delivering fresh supplies. “We’ve been without water for up to two months,” said Brenda Sánchez, a teacher who lives on the outskirts of the city. Sánchez’s family cooks, washes and bathes with water brought in from a weekly truck stop. Tempers often flare, he said, with residents fighting over water and blocking roads in an attempt to force the government to take the problem more seriously. Uncomfortable questions about water inequity come up frequently on social media in Monterrey, with stories of indecency going viral. This week, local authorities announced they will investigate whether a city neighborhood with particularly lush gardens and swimming pools is being fed by illegal water connections. Affluent suburbs like San Pedro Garza García have also been spared the worst of the water shortage. Local officials “wouldn’t dare disturb the industrialists who live in San Pedro,” said Bárbara González, a political commentator in the city. Beer bottles are cleaned at the Heineken factory in Guadalajara. Mexico exported nearly $5 billion worth of beer in 2019 © Susana Gonzalez/Bloomberg The beer industry in Monterrey developed around the Cuauhtémoc brewery which opened in the late 1800s. It is now owned by Heineken. Coca-Cola bottlers Femsa and Arca Continental are based in Monterey, while Coca-Cola’s Topo Chico sparkling water is drawn from a mountain spring in the city. Industrial users were largely able to operate without interruption despite the water shortages, activists said. They say industries often have their own wells with permits from Conagua that sometimes go back decades. “The industry not being affected makes me believe that the availability of groundwater is not in crisis,” said Antonio Hernández, a local activist. López Obrador questioned the priority given to industry. “[Water] It has to be prioritized and it has to be given to people first, not water for corporations,” he said in June. But Aldo Iván Ramírez, an engineering professor at the Tecnológico de Monterrey who worked on the state government’s recent water plan, said the industry consumed less than 5 percent of the water in Nuevo León state, of which Monterrey is the capital. “The majority of these large industrial companies have their own wells. . . They don’t draw from the municipal grid,” he said. The local Caintra chamber of industry said in a statement that the industry temporarily abandoned about 25 million cubic meters of water to help the city while companies drill and improve wells for public use. Still, Rodolfo Fernández, an architect and professor who lives in Monterrey, said that tap water only reached his home every third day, and then only for a few hours. However, he was never short of water for mixing cement at construction sites for his projects. “The companies that supply us with drinking water continue to provide the same service,” Fernández said. “They have ways of getting it.” López Obrador has turned his ire on breweries in the past, including in 2020 when he put construction of a Constellation Brands factory in the border city of Mexicali on an early vote. Permission to continue construction of a facility already under construction was rejected, although only 4.6 percent of residents participated in the vote. Constellation Brands denied that its brewing operations were over-exploiting the country’s scarce water resources. “Andrés Manuel López Obrador and the Mexican government have expressed their full support for our existing plans to operate our brewery in Mexico,” the company said in a statement. Earlier this year it announced plans to build a new brewery near the southeastern city of Veracruz. Alan Alanis, head of equity strategy for Latin America and Mexico at Banco Santander, said: “We believe that policymakers intend to make it more difficult to obtain new water permits, especially those for production in the north,” although this “it didn’t necessarily mean stopping or even curtailing current production.” The plan was to “promote investment in other areas in Mexico, as they did with Constellation Brands in Veracruz,” he added.
