Mexican Brewer Grupo Modelo Stops Production Of Corona Beer During Coronavirus Pandemic
Grupo Modelo, the brewer of Corona beer, will temporarily halt production and marketing operations in Mexico to comply with a coronavirus health emergency declared by the government.
Grupo Modelo, a subsidiary of Belgium-based AB InBev, said late Thursday it will stop production of its popular Corona brand and other beers beginning Sunday and is already in the process of scaling down operations to a minimal level.
The brewery operates with eight different plants that produces 46 national brands in Mexico. Grupo Modelo considers itself a huge part of the Mexican agricultural sector, which has been deemed an essential service during the emergency. However, brewers have been considered non-essential.
“The government recognizes agro-industry as an essential activity, with beer being one of the most important components of this industry and the main agro-industrial export product,” Grupo Modelo said. “More than 15,000 families benefit from the sowing of 150,000 hectares a year of malted barley.”
With the classification of the breweries, more than 75% of the staff that works at the breweries have been sent home, causing unemployment. AB InBev, the world’s largest brewer, reported a $170 million decline in profits during the first two months of 2020 because of the coronavirus pandemic.
However, with the workers losing their jobs, the sales of the beer are still going in a positive direction. CEO Bill Newlands said in an earnings call the brand has “ample supply to meet consumer demand” and doesn’t expect shortages in the near term.
Corona’s coincidental name with the virus hasn’t dented sales. Constellation said sales of its beer brands grew 8.9% for the first three months of this year, with Modelo and Corona being its top sellers. Sales accelerated in the first three weeks of March, the company said, with its beers growing 24% compared to a year ago.
Mexican health officials declared a national emergency Monday as the number of confirmed COVID-19 cases surpassed 1,000. Under the order, all non-essential businesses were ordered closed until April 30.