Mexico Is Running Out of Beer, But Keeps Brewing Corona For Americans

(Bloomberg) -- Mexico's beer lovers have had a hard time finding stocked shelves after the government deemed the industry non-essential and ordered it shut.

But Constellation Brands Inc., the company that brews Modelo brands like Corona in Mexico and sells them in the U.S. market, is continuing its operations in the country amid the coronavirus pandemic.

Last week, the operator of Latin America's largest chain of convenience stores said its Oxxo stores could run out of beer in the next 10 days as Mexican breweries run by Anheuser-Bush InBev SA's Grupo Modelo and Heineken NV have been shut for weeks. Constellation Brands, which has two plants in northern Mexico, has kept them going.

“We've had ongoing discussions with the Mexican government and continue to operate in compliance with the law,” said spokesman Michael McGrew in an email response to questions. The company has significantly reduced its production activities and the number of people on site at its facilities, he said.

Beer production isn't authorized under current sanitary restrictions, Deputy Health Minister Hugo Lopez-Gatell said in an April 10 news conference. Health officials declined to comment about Constellation's ongoing production, and Labor Ministry officials didn't immediately respond to a request for comment.

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.

Under current conditions, Constellation Brands only has inventory for about 40 days, which seems insufficient for popular configurations, according to a research note by MKM analyst Bill Kirk.