Water or beer?

Exports of beer from the Mexican state of Baja California have risen as resource conflicts simmer

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Mexicali beer

Agricultural workers joined the protests against Constallation Brands photo: Mauricio Villa

US company Constellation Brands has been constructing a giant brewery in northern Mexico for over two years. It resembles the site of a massive music festival. The ring-fenced property, which sprawls across more than 350 hectares, could become one of Mexico’s largest breweries – if residents of the nearby city of Mexicali do not derail it.

In 2006, Constellation Brands acquired rights to Grupo Modelo, producer of iconic Mexican beers Corona, Victoria, Pacífico and Modelo. The company began construction of the Mexicali factory in 2015. Shortly afterwards, it signed a secretive deal with the local government guaranteeing it water supplies. The move sparked a violent conflict in an arid region where resources are under increasing stress because of climate change.

Constellation Brands photo: Alejandra Cuéllar

On approaching the factory to take a picture, a man behind a metal gate jumps out of his chair. A private security van appears behind him. A third security guard appears accompanied by a German shepherd. He flashes his cell phone, taking pictures of me and my car’s license plate. Though the company denies any wrongdoing in the water conflict, they are clearly on high alert.

“The protests against Constellation Brands have fostered an entire social movement,” says Iván Martínez Zazueta of campaign group Mexicali Resiste. “When people realised that this company would be forcibly taking water from local communities, it caused uproar.”

Water scarcity

The production of a litre of beer, which often involves pasteurisation using steam and necessitates the regular cleaning of barrels, can require up to four litres of water. Constellation Brands’ Mexicali factory requires 20 million cubic metres of water per year, according to a Baja California State official document. The state government privately guaranteed the company this annual volume. Yet it may be difficult to ensure.

Alfonso Cortez Lara, a researcher from the University of Michigan State, said water supplies from the Colorado River, Mexicali’s lifeblood, have been badly hit by drought in recent years. He added that the US and Mexico have signed a treaty to grant the latter 1.8 billion cubic metres of water annually from the river.

Earlier this year, US President Donald Trump acknowledged the problem of dwindling resources and signed a law approving contingency plans in the event of further scarcity. US states that the river feeds would receive less water, he declared.

Beer resistence

The people of Mexicali became aware of Constellation Brands in 2016 when Francisco Vega, governor of Baja California, approved a new law that privatised drinking water, liberalised tariffs, and facilitated the company’s access to water.

The law, which was approved behind closed doors amid rumours of corruption, led to the biggest protests Mexicali had seen in years.

“I had never seen so many people outside on the streets,” said Martha Fernanda Vildosola, a university professor from Mexicali. In a city where temperatures can reach 50C, street protests are uncommon. That day, more than 40,000 people came out in defense of their right to water, she said.

The governor later reneged on the law. But it did not stop violent confrontations between the state, citizens and Constellation Brands.

Our governments act in favour of the companies and put people’s interests last

The brewery has already constructed 45% of the factory and has attempted to modify plans to show that it can be sustainable.

Constellation Brand’s environmental impact assessments, seen by Diálogo Chino, include a study on Mexicali’s water supplies made by the Mexican Institute of Water Technology. It states that there is enough water to supply the brewery until 2050, with demand expected to grow 1.12% annually.

However, a separate study carried out by Cortez Lara at the request of the National Council of Science and Technology (Conacyt), claims this is inaccurate and fails to take into consideration the growth in demand as the city’s population increases. Coupled with uncertain supplies, there will be a water crisis in 10 years or 15 years, Cortez Lara’s study said.

The brewery claims the Colorado River will not be its main water supplier. Instead, it will extract from wells it has already bought that were originally intended for agricultural use, but which it has called “urban wells”.

This categorisation enables the company to circumvent restrictions on use in the event of a drought, since under the National Water Law preferential access is granted for urban use, followed by use for agriculture, and finally, industry.

A Mexican lawyer, who preferred to remain anonymous owing to the sensitivity of the case, told Diálogo Chino this practice is illegal and is suing the company.

In 2018, citizens were enraged when the company tried to build an aqueduct on residents’ private property, inflaming the conflict.

A protestor opposing Constellation Brands’ beer factory in Mexicali (image: Mauricio Villa)

“I looked at my friends covered in blood and watched the police guarding the diggers,” says Diana Gabriela Aranguré, of Mexicali Resiste. “It was very clear what we’d been saying all these years: our governments act in favour of the companies and put people’s interests last.”

Demonstrators have stopped trucks travelling to the brewery, taken over the Baja California Congress several times and created their own news website to raise awareness about the conflict.

“At this point, street demonstrations have stopped and the opposition is waiting,” explains Mauricio Villa, another Mexicali Resiste member. Opposition groups are campaigning for a referendum on the project in an attempt to halt operations. They are also requesting a federal environmental impact assessment.

All the while, construction continues.

“We need people to go back to the streets, so they do not forget,” Villa says.

Exports to China

China has the largest beer market in the world. The Chinese drink 45 billion litres a year, according to 2018 figures from Euromonitor International, a marketing firm. The market is dominated by local beer, but beers like Corona have soared in popularity in recent years.

170million

Mexico’s beer exports to China last year in litres

Last year, Mexico more than doubled its beer exports to China, from 77 million litres to 170 million litres according to the Beer Chamber: Brewers of Mexico. Whether or not hydric stress will permit sustainable growth is a moot point.

Constellation Brands does not export to China directly. It has the rights to export only to the US. Belgium-based multinational Anheuser-Busch InBev exports Grupo Modelo’s beers to other countries.

However, Constellation Brands is embroiled in what has become a nationwide conflict over the environmental stresses created by booming beer production in Mexico.

In the last two years, four new factories have been built in the states of Chihuahua, Yucatán and Hidalgo. Six more have plans to expand in the same area in which Constellation Brands is located.

“The production of beer in Mexico is one of the most important economic activities for the country,” says Ernesto Granados, an environmental researcher at the Ibero-American University.

“But we are in a country where there is widespread corruption and here we see breweries as part of that corruption,” says Granados.

“Although there is a lot of talk about [public] consultation, people are not included in the decision-making process and water consumption is not transparent, so that generates serious problems.”