Trade and Investment

Mexicali chose water over beer

Constellation Brands' controversial brewery in Mexicali is voted down in a referendum after concerns about excessive water use
<p>Rubén Albarrán (left), lead singer of pop group Café Tacuba, protests against the Constellation Brands&#8217; brewery in Mexicali (image: Dulce Felix Saguchi)</p>

Rubén Albarrán (left), lead singer of pop group Café Tacuba, protests against the Constellation Brands’ brewery in Mexicali (image: Dulce Felix Saguchi)

In a controversial March 21-22 referendum, residents of Mexicali – a city in northwestern Mexico next to the US border – voted against the development of a beer brewery owned Constellation Brands that was to produce 20 million hectoliters of beer annually.

In the midst of the Covid-19 pandemic, which has taken more than 800 lives in Mexico, President Andrés Manuel López Obrador (known as AMLO) controversially asked Mexicali residents to vote on the brewery, contradicting expert recommendations on social distancing.


of voters decided against the Constellation Brands' brewery

Mexicali’s opponents of the project, which has raised fears over excessive water use in an area already suffering from acute hydric stress, ignored health advice and took to the streets. AMLO had promised that a popular vote would determine the brewery’s future and the results were definitive: of 36,781 votes, 76.1% voted against Constellation Brands, manufacturer of many well-known beers including Corona.

Construction has now been halted until further notice.

“With respect to these results… the Conagua (National Water Commission) will no longer issue the corresponding permits that were pending for the operation of the plant,” announced Diana Álvarez Maury, Mexico’s undersecretary for Democratic Development, Social Participation and Religious Affairs.

The decision to hold a citizen consultation angered local entrepreneurs, who were concerned about local opposition harming the prospects for future foreign investment.

It’s not the first time AMLO has put a major investment to a public vote. As president-elect, he held a referendum on Mexico City’s new US$13 billion airport, already under construction. Over 70% of voters rejected the project, with some environmental campaigners denouncing it as “ecocide”.

The same day AMLO announced the vote on Constellation Brands’ development, its president Daniel A. Baima, wrote to the president saying the company had no time for a consultation that would question their future in Mexico.

As long as the project is here and we’re unsure if the brewery going to operate in the city, eyes are still on it

“Our project in Mexicali has all the necessary permits to date and its operation does not imply any risk for the availability of water for the population,” he said.

With the arrival of the project, social opposition swelled, generating marches, protests and even the storming of a local government building.

In 2019 Tijuana, Alfonso A. Cortez Lara, a researcher from the Colegio de la Frontera Norte (CONLEF) published a report warning about water shortages due to over-exploitation of wells by industry.

By 2035, the groundwater deficit in the region was set to increase relative the current use of aquifers in Mexicali, according to the Baja California State Water Plan (PHEBC).

“This indicates the high degree of uncertainty regarding the future availability of water”, Cortez’s document reads; “if the principles of water security, sustainability and democratic environmental governance are to be considered as foundations of smart regional development, then they should be implemented”.

When Constellation Brands first arrived in Mexicali, the US-based company announced investment of US$1.4 billion, the creation of 32,000 jobs (2,100 direct and the rest indirect), and 489 million pesos (US$19.8 million) in contributions in 2016.

By February 2020, the company had invested US$ 900 million, more than half of the announced capital. Following the public consultation, all could be lost.

Suspicions of corruption

Iván Martínez Zazueta, a member of one of the civil groups that has led resistance to the brewery over the past four years, says that on the day of the vote, thousands, stood at voting tables to ensure their will was respected.

Both business organisations and activists criticised the consultation, which did not have any methods for guaranteeing the transparency of the process.

Voters say they saw dozens of people dismount from trucks financed by local companies in favor of the brewer, allegedly to vote in favor of Constellation Brands.

“We knew this was going to happen,” lamented Zuazueta, “but we bet on the people … and the victory was for the people.”

On the day of the consultation, Rubén Albarrán, a Mexican musician well-known worldwide for fronting rock band Café Tacuba, decided to observe.

We have had a respectful dialogue with the government authorities in Mexico about the next steps

“Water is our right, rights are human … this transnational [company] is illegal because without water there is no life … [get this] ecocidal company out of here,” said Albarrán. “Don’t forget, Mr. President, water is for the people … for my land, my children and my people,” he said.

Despite the referendum defeat, on April 1 Constellation Brands’ itself that issued a statement implying the story wasn’t over yet:

“We have had a respectful dialogue with the government authorities in Mexico about the next steps of our construction project in Mexicali. We will continue working with the authorities in search of an agreement that benefits all parties.”

Mexicali is now living through a period of uncertain calm. The crisis generated by Covid-19 has put any attempts at dialogue and the fate of the brewery on hold. Yet campaigners are hesitant to declare victory.

“As long as the project is here and we’re unsure if the brewery going to operate in the city, eyes are still on it. The fight continues,” Martínez says.