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Constellation Brands Reducing Brewery Production in Mexico

By Eric Volkman - Apr 8, 2020 at 8:17PM

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The move is due to the coronavirus pandemic.

Mexico is going dry for international liquor company Constellation Brands (STZ -3.88%). The company wrote in a press release Wednesday that, in light of restrictions in the country arising from the SARS-CoV-2 coronavirus outbreak, it is reducing its brewery activities there.

The company did not delve into details about this, although it seemed to imply it wasn't halting its beer-making activities in the Central American country altogether. Recently, Mexico's government ordered a temporary shutdown of all non-essential business activities. This, of course, is among a set of social distancing mandates to mitigate the spread of the coronavirus.

Four glasses of beer in a row.

Image source: Getty Images.

Constellation owns two breweries in Mexico. One is located in the city of Obregon near the Gulf of California, and the other is in the northeastern town of Nava close to the U.S. border.

The company said in its press release that "[w]e are taking these additional steps after gaining more clarity related to the Mexican government's response to this health and economic crisis." It sounded a reassuring note by adding that the supply of product to the U.S. would not be affected.

Other companies have already shuttered their brewing operations, most notably Grupo Modelo -- owned by global beer giant Anheuser-Busch InBev -- and European producer Heineken. As per a 2013 antitrust ruling, Constellation distributes Grupo Modelo beers (notably the popular Corona) in the U.S.

On Wednesday, Constellation stock rose by almost 5.5%. That beat many of the gains posted by many fellow consumer goods titles, in addition to the higher-profile equity indexes.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Brands. The Motley Fool recommends Anheuser-Busch InBev NV. The Motley Fool has a disclosure policy.

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Constellation Brands, Inc. Stock Quote
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