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A man votes in last weekend's brewery referendum. A man votes in last weekend's brewery referendum.

AMLO claims corruption in granting of Mexicali brewery permits

'How can a permit be given to build a brewery that uses water where there is a shortage of water?'

President López Obrador claimed on Wednesday that there was corruption in the granting of permits to the United States beverage company Constellation Brands for the construction of a brewery in Mexicali, Baja California.

López Obrador made the accusation at his regular news conference, two days after the government announced that it would halt the US $1.4-billion project because about three-quarters of voters opposed it in a referendum last weekend.

“Of course there was [corruption]. … It’s just a matter of thinking: how can a permit be given to build a brewery that uses water where there is a shortage of water?” he said.

The project was given the green light by the government of former President Enrique Peña Nieto, who was in office from 2012 to 2018. Farmers and other Baja California residents opposed it on the grounds that it would threaten the local water supply, a claim that the company consistently rejected.

Both the Ministry of Environment and the National Water Commission said last week the brewery would not have an adverse effect on the region’s water supply.

But the concern now is not water but future investment.

López Obrador asserted that the decision not to allow Constellation to open its Mexicali brewery would not hurt Mexico’s prospects of attracting new investment.

On the contrary, he said, putting an end to corruption and establishing an “authentic rule of law” will allow Mexico to lure more private and foreign capital.

Business groups, on the other hand, say that the cancellation of the brewery, where Constellation planned to make beers such as Corona and Pacífico to export to the United States, will hurt investment.

“Production of the most famous Mexican beer in the world is prohibited in Mexico – who’s going to want to invest in a country with such contradictions and absurdities?” asked Mexican Employers Federation President Gustavo de Hoyos.

López Obrador, who also canceled the previous government’s new Mexico City airport project after a controversial public consultation, told reporters that it was unclear whether the federal government would have to pay compensation to Constellation, which has invested about $900 million in the brewery.

He said that a decision about compensation would not be made until the government meets with representatives of the company and carries out a review of how the brewery permits were granted. The president added that he is willing to listen to Constellation’s point of view about the consultation and cancellation of the brewery, which is about 70% complete and was expected to begin operations at the end of 2021.

The company said in a statement Tuesday that it had listened to the government’s “messages ” and was ready to meet with López Obrador and his cabinet to discuss alternatives.

Constellation “will continue working with local authorities, government officials and members of the community on next steps related to our brewery construction project in Mexicali and options elsewhere in Mexico,” said CEO Bill Newlands.

The governor of Nayarit has already extended an invitation to Constellation to invest there, highlighting that there is sufficient water in the Pacific coast state to support a brewery.

Source: El Financiero (sp) 

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