Mexican Beer Faces Uncertainty Under Proposed Trump Tax

At a time when Mexican beer sales were surging in America, the category suddenly faces a rather large roadblock.

President Donald Trump in his first days in office seems determined to follow up his election-season promise to build a better wall between America and Mexico. Yesterday, we learned just how he intended to back up his infamous claim that Mexico would pay for that project. Trump’s press secretary, Sean Spicer, said that the White House is considering a 20% tax on imports from Mexico.

This would obviously affect imported beer from Mexico. It would likely hurt what has become a big business in America.

Brews brought in from that country represent 67% of all U.S. beer imports, according to a Wall Street Journal article. ““U.S. imports of beer from Mexico rose 15% to 531.9 million gallons in the first nine months of 2016,” the article states.

The reaction on Wall Street has already been negative. Stock of Constellation Brands — the largest U.S. distributor of Mexican beer, including Corona — continued its post-election slump, dropping from $154.11 yesterday morning to $149.46 at close. Stock of Heineken, America’s second largest importer of Mexican brews, including Dos Equis and Tecate, is also trending downward.

What beer category stands to benefit from the potential decline of Mexican imports remains to be seen.

Photo credit: PhotosForClass.com

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