E-Malt.com News article: Mexico: Opposition to Constellation Brands’ new brewery in Mexicali continues

A major U.S. beer manufacturer’s decision to build a giant production plant in Baja California’s desert capital has been cause for much celebration in Gov. Francisco Vega de Lamadrid’s administration. But not everybody is applauding, the Reading Eagle reported on January 29.

Constellation Brands, maker of Modelo and Corona beers, finds itself in the crossfire of a bitter dispute. On one side are government officials who are vowing to see the project through; on the other, opponents determined to shut it down, saying the plant will use a large amount of water that should go to local farmers.

The stakes are high: The project is a state-of-the-art brewery that represents an investment of more than $1 billion — the largest the region has seen in years, some say decades, and will provide 750 permanent jobs.

The plant, scheduled for completion in late 2019 or early 2020, will be export-oriented, with all product destined for U.S. consumers. In the initial phase, it expects to produce 132 million gallons annually — the equivalent of 58 million cases of beer; at a maximum it would produce four times that amount.

“Mexicali is growing like it never has in its history, and part of the reason is that Constellation Brands is coming to the city,” said Carlo Bonfante, the state’s secretary of economic development. “All projects are important, but this is an emblematic project.”

But even as permits have been issued and construction has moved forward, opposition has continued.

Alfonso Cortéz Lara, a researcher at the Colegio de la Frontera Norte, said misgivings over the plant have persisted in the Mexicali Valley, a historically agricultural region. “There is doubt because the water is going to an activity that is not necessarily going to bring benefits to this region, ones that are tangible, observable, measurable.”

Tensions flared earlier this month as several dozen protesters blocked workers from digging a trench for an aqueduct to the facility. They threw rocks and dirt at state and municipal police who moved in on the crowd, and one protester drove a vehicle into a line of officers, who were not injured. The police, protected with riot shields but unarmed, also threw rocks at the crowd, according to journalists covering the event.

Six people were arrested, and one demonstrator suffered a broken jaw.
On January 25, a peaceful protest brought some four dozen demonstrators outside Constellation Brands’ Mexicali corporate offices, holding signs that read, “Constellation Go Home” and “Fuera Constellation.”

“The issue here is water and government corruption,” said Leon Fierro, an engineer who was one of the group’s leaders. “Sure, they want to invest a few million, but practically none of it will benefit Mexicali’s citizens.”
Opponents have questioned the state government’s championing of the project.

“The perception is one of corruption,” said Daniel Solorio Ramírez, a constitutional law professor at the Autonomous University of Baja California who opposes the brewery. “Our problem is that we have a government that is not made up of politicians, but of businessmen, who are experts at conducting business.”

But the state government is not alone in backing the giant brewery. Last week, Mexico’s federal government stepped forward to offer “absolute support for the Constellation Brands project,” according to news articles quoting the interior ministry’s top representative in Baja California.

In an interview in Tijuana on January 24, Gov. Vega defended the project.

“I heard some voices say there is not enough water in Mexicali….but the National Water Commission which administers the water supply….never told the governor to stop investments, nor the growth of the city for lack of water.”

Just how much water will be used by the plant has been a point of contention. Bonfante, the economic development secretary, said that at maximum capacity, the plant would draw less than seven million cubic meters annually, about 1.8 billion gallons, a quantity that he said would irrigate about 750 acres of wheat. “This represents .03 percent of the water available in Mexicali, it’s an insignificant quantity,” he said.

Opponents say the plant will consume nearly three times that amount.

Last year, their protests led to the state canceling construction of a 30-mile aqueduct to deliver water after protesters said the officials had failed to obtain an environmental permit. The company said it would not be deterred, and would proceed with its own plan.

Opponents say the water will come from wells that are overdrawn at the northern end of the Mexicali Valley.

Last week, a Constellation Brands spokesman referred questions about the brewery’s water supply to the state water commission, CESPM. “We are not responsible for decision-making related to water sourcing,” said Michael McGrew, Constellation’s vice president for corporate communications.

In its fiscal year 2017 annual report, Constellation Brands stated “we expect our Mexicali Brewery will receive an allocation of water originating from an aquifer.”

The brewery “will be one of the most state-of-the-art and highly efficient breweries in the world,” McGrew wrote in an email. “We are committed to doing our part to safeguard natural resources such as water in Mexico and other markets around the world where we have operations.”

Like other parts of Mexico’s northern border, Mexicali has long seen its fortunes closely tied to the United States. The city has a sizable number of export-oriented factories known as maquiladoras, which employ some 65,000 people. At the northern end of the Mexicali Valley, growers use high-tech irrigation systems to produce a wide range of winter crops aimed at U.S. consumers.

South of the city, on a large property off the road to San Felipe, behind a fenced topped with barbed wire, construction of the future brewery is already well underway. A reporter driving the perimeter on January 25 was quickly approached by private security guards.

For Salvador Mena, a small farmer who lives near the future plant, and has been housing brewery opponents on his property, the issue is a simple one: “They’re going to take millions of cubic meters of water, and we won’t have enough to irrigate our crops,” he said. “We believe the water is for growers, not for making beer.”

Opposition to the plant first surfaced last year, during massive and unprecedented anti-government protests that drew tens of thousands of angry demonstrators to state government offices in Mexicali’s Civic Center. Fueling the anger was the prospect of rising gasoline prices as Mexico moved to deregulate its energy sector. But demonstrators were also protesting a hastily approved state water law that opened the door for private sector involvement in functions such as water distribution and sewage services — a law later annulled by the governor.

Crowds have since been greatly diminished. But many opponents are registering their discontent through a Change.org petition denouncing the “irregular and irresponsible process of authorizing the Constellation Brands Brewery” that has more than 23,000 signatures.

Business leaders have stood squarely behind the project.

“It would be an incalculable blow to Mexicali’s reputation, to the state, if such a company is forced to leave due to a lack of legal guarantees,” said Gustavo De Hoyos, an attorney from Mexicali who is national president of the influential employers group Coparmex.

“There is a group of citizens that has legitimate concerns, but we cannot allow when there is an investment, that pseudo-leaders see this investment as a way of pressuring for compensation,” said De Hoyos.

He disagrees that the future plant’s water consumption is the primary concern, but said there has been “inadequate communication” on the part of the state. “Any questions raised on actions by the government should be clarified, and if there were violations, there should be sanctions.”

The opposition “is unprecedented,” he said. “I don’t recall any investments, even smaller ones, that had to fight so hard to establish itself.”


29 January, 2018