Mexico: 74% vote against Constellation Brands brewery in Mexicali; private sector confederation rejects result

On Sunday 22nd March, the Mexican Government held a public consultation in Mexicali regarding the Constellation Brands brewery, a mega project that began construction in 2016.  74% of those who voted rejected the construction of the project.  The Government has expressed they will listen to the will of the people and won´t grant the company the licences they require to continue with the project. 

However, the country´s top business confederation, CCE, has rejected the consultation process labelling it is as dangerous for the prospects of foreign investment.  The company has yet to comment.

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27 March 2020

Mexicali brewery referendum unconstitutional: bar association

Author: Mexico News Daily

The Mexican Bar Association announced its legal opinion on the legality of a referendum to halt construction of a brewery in Mexicali, Baja California: they say it’s unconstitutional.

Nearly 37,000 residents of Mexicali and surrounding areas voted overwhelmingly to reject Constellation Brands’ US $1.4-billion plant over the weekend.

The association said in a press release that the consultation violated four articles of the Mexican Constitution, making it illegal to force the company to halt construction.

Calling the vote a “participatory exercise,” it also claimed that the results of the referendum were not intended to be legally binding.

“… its results cannot be binding because that would mean that the [permits] already issued could be revoked by a groundless participatory exercise, … without due process, resulting in the violation of article 14 of the Constitution,” it said.

Citizens of Mexicali have protested the plant for years, citing the threat they say it poses to the area’s water supply, though construction is now 65% complete.

Constellation Brands claims that the plant will not negatively affect the water supply and will create 32,000 direct and indirect jobs.

Although the National Water Commission and the Environment Ministry had both stated that their inquiries revealed that the plant would not negatively affect the water supply in Mexicali, they will not issue future permits as a result of the referendum…

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24 March 2020

Constellation Brands:Referendum in Mexicali tears down plans to build brewery in Mexico

Author: El Universal (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…

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23 March 2020

Constellation Brands : Mexican City's Residents Reject Constellation Brewery in Referendum -- Update

Author: Market Screener

…Around 76% of those who voted rejected the project developed by Constellation, the third-largest U.S. beer producer and brewer of Mexico's Corona and Modelo brands for U.S. consumers. Turnout was less than 5% of eligible voters.

As a result of the vote, the government won't grant a water supply permit to Constellation Brands, Deputy Interior Minister Diana Álvarez said on Monday…

The cancellation of such a large-scale project sends a negative signal to foreign investors, business groups say…

"Farmers were not taken into account when this project was launched," said René Prieto, a forage, corn and alfalfa producer in the Mexicali Valley who voted against the plant's construction…

Mr. López Obrador said he will meet with the company's management and evaluate a possible relocation of the plant to a region with greater water sources.

"We have to listen to the people and govern with the popular mandate," Mr. López Obrador said Monday…

The country's top business confederation said the referendum was conducted in an irresponsible way as coronavirus infections spread rapidly across the country.

"Carrying out a referendum to determine the viability of a private investment project that has all the permits violates the current legal framework and creates an environment of legal uncertainty in Mexico," the organization said in a statement on Sunday…

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20 March 2020

Fate of US brewery in drought-hit Mexico goes to Amlo poll

Author: The Guardian (UK)

…The fate of a giant US brewery under construction in Mexico’s parched borderlands will be put to a vote this weekend in the latest attempt at direct democracy by the country’s populist president.

The brewery in Mexicali has provoked controversy in a region where the climate crisis has already caused droughts, and where farmers and residents have taken exception to a US company, Constellation Brands, extracting water to produce beer for export.

But the vote over its construction…has drawn criticism from both sides in the row, and unsettled critics of the president, Andrés Manuel López Obrador…

Business groups have cautioned against the plebiscite, warning that a no vote could risk torpedoing investor confidence at a time when the economy is diving and investors are wary after the airport decision…

Opponents of the brewery have expressed mixed opinions on the consultation, though they previously pushed for a statewide plebiscite. Constellation Brands declined to comment on the vote.

Alfonso Cortez Lara, a water expert at the College of the Northern Border, said: “Neither of the two sides will accept the results, [which] are not binding.”

He said a more productive posture would be for the state government and national water commission to accept recommendations from the national human rights commission which found that the project “violated the human right to water”.

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