Things That Matter

Thanks To Coronavirus, Mexico Is Experiencing A Severe Beer Shortage And It Could Have Serious Consequences

Many were surprised when Mexico’s government declared beer production a ‘non-essential’ service when it implemented measures meant to prevent the spread of the Coronavirus. In early April, the federal government mandated the closure of millions of businesses – including breweries.

President Andres Manuel Lopez Obrador declared a national health emergency at the end of March and called for a halt to non-essential activities that included most manufacturing. 

Now, Mexico is running out of cerveza.

As the country faces another month of quarantine, a new crisis looms on the horizon: Mexico is running out of beer.

Beer is in short supply across Mexico as manufactures were ordered closed because of Coronavirus. Mexico’s beer lovers have had a hard time finding stocked shelves after the government deemed the industry non-essential and ordered it shut down.

Since President AMLO declared a national health emergency, beer production is no longer authorized under current sanitary restrictions. This means that production plants from Tabasco to Baja have had to shutter their doors. As a result, beer is a hot commodity. In fact, last weekend at least 25 states across Mexico reported beer shortages both in large supermarket chains and corner tienditas.

Although Mexico is the world’s largest exporter of the beverage — cornering almost 27% of the global beer market — the federal Health Ministry has made it clear that the product is not essential, even after the Agriculture Ministry invited beer manufacturers to resume production in early April.

As of Friday, the giant Mexican chain of convenience stores, Oxxo, announced they only had inventory for 10 days.

Oxxo is Latin America’s largest chain of convenience stores and they’re quickly running out of beer.

“If and when we run out of beer, which could happen in the next couple of weeks, that would be negative for sales,” Juan Fonseca, Femsa’s head of investor relations, said on a conference call with analysts. “I don’t want people to get off the call and run to the store, but right now we are probably looking at about 10 days of inventory.”

Although beer production doesn’t pose a major health risk, many see it as possibly limiting adherence to strict social distancing measures. When you drink alcohol, you often become less inhibited and it can also act as a social lubricant – meaning beer drinking may lead to more casual get together or parties.

“I think the government might be afraid if they drink beer, there will be more social interaction,” Padilla said in the call with analysts.

Several groups are urging the government to classify beer as an essential product to help mom and pop tiendas as well as to avoid social unrest.

Mom and pop corner shops and tienditas are struggling to make ends meet since beer often makes up more than 40% of their sales.

“There’s no beer because there’s no production. They closed the plants because of the disease,” said Emilio, a Mexico City shop owner with a few lonely cans of less popular brands of beer left in his refrigerators. Shops carrying ‘No Hay Cerveza’ signs are littered across the city.

“It’s hitting us real hard because beer is what we sell most. Now that we don’t have any, it obviously hurts us. My business supports eight families,” he said among mountains of empty bottles.

Even larger grocery stores are starting to see stocks run low, and the scarcity is being felt at the cash register, as beer prices have risen around 30%. In Tamaulipas, the price of a six-pack has doubled and a case of beer that used to sell for 280 pesos is now going for up to 600 pesos.

Some states are under mandatory ‘dry’ laws while a booming black market is leading many to worry about violence.

Some areas of the country are under government-mandated dry laws either banning outright the sale of alcohol or limiting the hours during which it can be purchased, but the shortage has imposed de facto dry laws on other regions simply because supplies do not exist. 

Even in the capital, Mexico City, certain parts of the city have enacted dry laws banning the sale of alcohol.

Meanwhile, smugglers on the northern border are bringing in clandestine shipments of beer from the U.S. Beer runners are taking to social media to sell their illegal beers, which are being trafficked similarly to cocaine and marijuana. Sellers will bring beer to a customer’s door to lower the risk of being caught by police, but purchasers will often pay a 300% premium for the service.

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