If President Trump actually closes the U.S.-Mexico border, it will be a severe blow to Constellation Brands which has become the No. 1 beer importer and No. 3 in terms of beer market share thanks to its acquisition of the U.S. rights to Corona and other Grupo Modelo brands.
If the border is completely closed, none of that product will be coming into the U.S.
To be sure, CBrands can – and we’re certain is – stockpiling in the U.S. as much of the output of its Mexicans breweries as possible. But that doesn’t change the fact that a few days of border closure would completely interrupt the normal flow of goods from Mexico to the U.S.
It is possible, of course, that CBrands might be able to ship it by sea. But even that would be a massive disruption of its supply chain.
Also threatened by the closure would be importers of tequila, including Brown-Forman Corp. As is the case with beer, we’re certain they are shipping a good amount of product into the U.S. to be able to supply customers in the event of a closure.
The U.S. Chamber of Commerce decried the potential closure, with Neil Bradley, the Chamber’s No. 2 executive, warning that closing the “U.S.-Mexico border would inflict severe economic harm on American families, workers, farmers, and manufacturers across the United States. U.S. trade with Mexico exceeds $1.7 billion daily, and nearly half a million people legally cross the southern border every day as workers, students, shoppers, and tourists.
“Even threatening to close the border to legitimate commerce and travel creates a degree of economic uncertainty that risks compromising the very gains in growth and productivity that policies of the Trump Administration have helped achieve,” Bradley said.