Mexico: Beer supply shortage drives black market prices through the roof

With beer production having been deemed a nonessential activity during the coronavirus pandemic, breweries have been shut down since early April. Now Mexico is running out of beer, the Mexico News Daily reported on May 4.

The short supply has driven prices through the roof on the black market, where a six-pack of cold ones can cost up to 300% more than pre-coronavirus prices.

Smugglers on the northern border are bringing in clandestine shipments of beer from the U.S., where production continues.

In southern Mexico, illegal beer runners in Tabasco, where alcohol sales have been prohibited for the past month, recently saw 85 cases of beer meant for resale seized by authorities. The shipment was destroyed by a bulldozer.

Last weekend at least 25 states across Mexico reported beer shortages both in large supermarket chains and corner stores.

As of May 1, the Oxxo chain of convenience stores had inventory for 10 days.

Some areas of the country are under government-mandated dry laws either banning outright the sale of alcohol or limiting the hours during which it can be purchased, but the shortage has imposed de facto dry laws on other regions simply because supplies do not exist.

And in areas where beer is still in supply, prices are soaring. In Tamaulipas, the price of a six-pack has doubled and a case of beer that used to sell for 280 pesos is now going for up to 600 pesos. In Coahuila, prices are up by 40%. In Chihuahua, panic buying and hoarding have exhausted shelves.

In Monterrey and Tijuana, stores are posting signs saying they have no beer.

Beer runners are taking to social media to sell their clandestine wares, which are being trafficked similarly to cocaine and marijuana. Sellers will bring beer to a customer’s door to lower the risk of being caught by police, but purchasers will often pay a 300% premium for the service.

Not only do regular beer drinkers miss out, so too do the government’s coffers as they are no longer collecting beer tax money. In 2019 those revenues amounted to around 1 billion pesos, almost US $41 million.

According to Mexico’s National Institute of Statistics and Geography, there were about 65 million regular beer drinkers in 2018, about half the population.

05 May, 2020