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Mexico Says Constellation Brewery To Be Built By River After Water Dispute

By Dave Simpson

A new Constellation Brands brewery, diverted to the Gulf coast state of Veracruz in Mexico after a dispute over water use, will be built by a major river, a government official has said.

The plant is part of planned investment in Mexico of up to $5.5 billion by the U.S. producer of beer, wine and spirits through 2026.

Constellation will build the plant by the Rio Papaloapan in central Veracruz, presidential spokesperson Jesus Ramirez told Reuters.

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"As a government we're not opposed to private investment, nor foreign investment. They're welcome as long as they respect the environment...and Mexican laws."

Constellation, the brands of which include Corona beer, Robert Mondavi wines and Svedka vodka, has yet to decide on a site or budget for the plant, company spokesperson Nina Mayagoitia said.

Dispute Over Water Access

Constellation said this week that it would build the plant in Veracruz. A dispute over water access prompted it in 2020 to halt construction of its largely completed brewery in the arid, northern border city of Mexicali.

Area residents said the brewery, which had cost hundreds of millions of dollars, threatened their water supply and rejected it in a referendum promoted by President Andres Manuel Lopez Obrador.

The referendum result caused widespread consternation among business groups, and the deal to bring the plant to Mexico's poorer south is a victory for Lopez Obrador.

Investment

Constellation has said that it will invest $5.0 billion to $5.5 billion in fiscal 2023 to 2026 on the Veracruz brewery and two other plants already in operation in Mexico.

Compensation Reports Denial

Constellation denied media reports that Mexico had compensated it for losses on the Mexicali project, which was initially earmarked as an investment worth approximately $1.5 billion.

"We're in talks, hoping that [money] can be recovered, but there's no certainty," Mayagoitia said.

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

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