Mexican-Beer Industry Already Feeling The Effects Of Trump’s Proposed Policies

RealClear Staff

            

     It seems everyone’s unnecessarily on high alert with the recent presidential election. The fear is even flowing over into the beer world. While Trump won’t officially be inaugurated until January, his southern-border idea has put a horrifying head on the Mexican-beer industry.

[Image: Getty Images]

The political weather had analysts announcing a Trump presidency could be bad for America’s largest Mexican-beer distributor. Constellation Brands, Corona’s parent company, recently took an eight-percent drop in their shares. There was also talk of Trump putting higher taxes on imports.

However, Constellation Brands CEO Rob Sands doesn’t seem to be sweating it. “I don’t expect [the election] to affect our business in the short term and as these policies develop, we will respond accordingly and engage with government accordingly,” Sands said at an investors meeting. “And I would add: We’ve had a long history of working with our representatives from all levels of the US government from both political parties. As Trump develops his plans, we will continue to engage with them.”

In addition to Constellation’s US-bestselling Corona, it also owns Negro Modelo and Pacifico. With these brands under its belt and Sands seemingly serene disposition, the company’s currently undergoing an almost $4.5 million expansion! (If that’s not confidence...what is?)

[Constellation Brands CEO Rob Sands | Photo: Getty Images]

On top of that, Sands spoke of a possibly lucrative marijuana arm for the Constellation crew—the plant has received legal support in several states (California, Main, Massachusetts and Nevada).

Sands’ company is also considering weed-infused ales. “There are going to be alcoholic beverages that will also contain cannabis,” Sands said and added they see legalization as an important business opportunity. In the US alone, the bud business is expected to bloom from $6 billion (2015) to $50 billion by 2026, according to data culled by Cowen & Co. However, the company’s still contending with cannabis being illegal under federal law.

Out on the political-party trail, Trump was charging for a deep change in US, trade policies. If executed, the food industry will feel the burn—US-produced brewery-dependent barley could cost a lot more.

Only time will tell if Trump’s proposed tariffs will take their toll on Constellation Brands and other beer outfits.

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