Grupo Modelo suspends Corona beer production

AB InBev’s Grupo Modelo, the brewer of Corona, has temporarily halted production of the beer in Mexico in line with government orders during the Covid-19 pandemic.

According to a statement dated 2 April and published by the Mexican brewer on social media, the production of Corona beer, as well as 45 other brands including Modelo and Victoria, has been suspended due to the Covid-19 lockdown.

Last week the Mexican government suspended non-essential activities, including brewing, in the public and private sectors until 30 April in an effort to halt the spread of the coronavirus.

“If the federal government considers it appropriate to issue some clarification confirming beer as an agro-industrial product, at Grupo Modelo we are ready to execute a plan with more than 75% of our staff working from home and at the same time guaranteeing the supply of beer,” Grupo Modelo said in its statement.

The company currently exports its brands to 180 countries and has a production capacity of 82 million hectolitres a year, spread across eight plants in Mexico.

Last month, parent company AB InBev scrapped its 2020 outlook as the impact of coronavirus increased in scale. It has taken out its entire US$9 billion loan facility to stave off the effects of the virus. In February it reported that first quarter earnings will be down 10%, with revenue loss of around $285 million. 

Meanwhile, Constellation Brands, which has distributed Corona in the US since 2013, said the unfortunate name of the beer had not dampened sales, despite reports that people were avoiding the brand during the pandemic.

According to data from IRI, in the four weeks to 22 March, sales of Constellation’s beer brands rose 24%. Constellation’s fourth quarter results, posted on 3 April, revealed that its beer business recorded 7.5% volume growth “due to the continued strength of the Modelo and Corona brands”.