Becle suffers profit slump

Becle, the world’s largest Tequila producer, suffered a 62% slump in its net profits during the second quarter of its financial year.

The company, which owns the Jose Cuervo stable of tequilas, made 497.8 million pesos ($27.2m) from sales that increased by 1% from the same period in 2023.

A key factor in the profits slump was the continuing appreciation of the Mexican peso, especially against the US dollar, where it has gained 10% in the past 12 months.

Becle, which is controlled by the Beckmann family, makes more than 50% of its sales in the US and Canada, where net reenues rose by 11.2% but it was hit by falling demand elsewhere.

Sluggish

In the Mexican domestic market, revenues were 10.7% lower and they fell by 12.2% in the rest of the world.

The company said: “In the first half of 2024, industry consumption remained sluggish due to macroeconomic challenges, inflationary pressures and reduced commercial inventories in key markets.”

A further challenge is that although Jose Cuervo remains the world’s best-selling tequila brand, consumers regard it as a commodity product, and despite some resistance to price rises over the past year, most of the growth in the market has been achieved at the premium end of the spectrum.

Fire

Separately Becle was hit last week when six workers died and two others were injured in in an explosion at a distillery in the town of Tequila.

“The incident involved the explosion of a tank car,” Jalisco state’s civil protection agency said, adding that the fire ignited three additional tank cars, each with a capacity of 219,000 litres.

The cause of the fire is not yet known but the company said it was assisting authorities with their investigation and would reinforce security controls at its facilities.