Mexico Shuts Down Beer
Mexican authorities have ordered the shutdown of all non-essential businesses and industries for the entire month of April. To the surprise of many, alcoholic beverage production was included in the list of non-essential companies. While Anheuser-Busch InBev owned Gruopo Modelo and Heineken have suspended production, Constellation Brands has not. This was a key topic on Constellation Brands' investor call on Friday.
Some Mexican states have implemented restrictions on the hours of operation for businesses selling beer, while others have prohibited the sale of alcohol. The state of Tabasco went the furthest by enforcing prohibition, outlawing the consumption of alcohol. This has resulted in panic buying across the country. The beer and tequila industry has lobbied for exemptions.
Banning the sale for consumers should get a more negative reaction than just suspending production.
Alcohol sales past their peak
Nielsen said sales of alcohol increased 55% during the third week of March. Wine sales grew 66%. Beer sales grew 34%. Larger beer packs of 24 or 30 rose 90% for the week as consumer stocked up compared to 12 pack sales up 61% and six-pack sales up 16%. Nielsen predicted it would be the peak week for alcohol sales. Brick and mortar liquor stores saw sales increase by 75%.
For the four week period, Diageo spirits sales grew 19.5% in line with Constellation Brands while Beam Suntory grew 21.7%, and Brown-Forman grew 28.9%.