Constellation Brands:Referendum in Mexicali tears down plans to build brewery in Mexico
…Constellation’s shares tumbled 12% on Monday to close just above USD $105, down from a previous high of USD $208 on February 20.
López Obrador said his support for the result of the local referendum didn’t mean his government opposes foreign investment, adding that he planned to discuss an alternative site for the brewery with Constellation…
Earlier this month, the U.S.-based company said it would consider other locations if Mexico became problematic. The results came as the Mexican peso hit a new low against the U.S. dollar, trading at MXN $25 per US.S. dollar for the first time ever…
Environment activists in Mexicali argued that the project put water supplies at risk. Constellation, which brews Modelo, Corona, and other Mexican beers for export to mostly American drinkers, has countered that the brewery would affect less than 1% of local water supplies and that the plant had all the requisite permits. A Mexican government official said that under Chapter 14 of the newly ratified United States Mexico-Canada Agreement, the project cancellation could be considered an indirect expropriation if the U.S. government wanted to pursue the matter. “Surely the U.S. government is directly talking to the Mexican Foreign Ministry about this,” the person said, speaking on condition of anonymity…