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Constellation Plant In Mexico May Spur $2.6bn In Investment, Official Says

By Dave Simpson

A new Constellation Brands brewery to be built in the Mexican state of Veracruz, announced after a dispute over water stymied plans for a plant on the northern border, could spark $2.6 billion in investment, a government official has said.

Investment

The plant in the Gulf coast state is part of a previously announced $5 billion to $5.5 billion investment in Mexico through 2026 by the US maker of beer, wine and spirits.

Constellation Brands plans to initially invest $1.3 billion in the brewery, Enrique Nachon, Veracruz's economic and port development minister, said in an interview.

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Veracruz hopes the company could double that sum, by either upping production once the plant is completed or investing locally in bottling and infrastructure to export goods, Nachon added.

"We're pushing for both these investments to stay in Veracruz, that is, $2.6 billion through 2026," he told Reuters, adding that the state government has been in regular contact with the company.

Employment

The brewery's construction will employ up to 2,000 directly and 12,000 indirectly. Once operating, the plant will create up to 750 jobs directly and 4,000 indirectly, Nachon said.

Constellation Statement

"We continue to work with federal and state government officials in Mexico on plans for a new brewery in ...Veracruz, where the government is trying to drive investment, in a suitable location with ample supply of water and a capable workforce," Constellation said in an e-mail.

Baja Brewery

Constellation had previously spent approximately $666 million constructing a brewery in the arid state of Baja California. It was called off after residents concerned about water use rejected it in a referendum encouraged by President Andres Manuel Lopez Obrador.

Brewery's Exact Location

Nachon did not confirm previous comments by a government official that the new plant would be built by one of Veracruz's central rivers, the Rio Papaloapan.

He said that the plant will use underground water sources, and that Constellation has so far looked at 27 plots of land.

The brewery's exact location will be revealed in a joint announcement from Constellation Brands and Lopez Obrador, Nachon said.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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