Less than a week after Donald Trump’s swearing in, his administration has already had its first major impact on the beer industry. It could be the first of many.
Yesterday, as part of the ongoing conversation around how Trump plans to get Mexico to pay for a wall on the US/Mexico border, White House Press Secretary Sean Spicer floated the concept of raising money through a 20 percent tariff on Mexican imports. (Later, he backtracked, calling it only “one idea”). The statement sent share prices plummeting for Constellation Brands – the US-based company that makes a number of the best-known beer brands in Mexico, including Corona and Modelo, specifically for export to the United States. The stock dropped about 2.7 percent, an on-paper loss in value of over $700 million.
Investors’ fears are that a tariff could hurt Constellation’s bottom line by driving up the cost of their core Mexican brands – which, ironically, has been one of the hottest selling segments in the beer industry.