Modelo Agrees To Reduce Its Tied House Monopoly In Mexico

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I know governments have become increasingly beholden to business interests in my lifetime, but the idealist in me is unable to just be okay with that. It’s certainly true here in the U.S., where politicians are bought and sold, and the interests of ordinary folks rarely count for much in political decisions. And that’s unlikely to change while corporations are essentially immortals with all of the rights of people and none of the consequences or responsibilities, and whose profits have been declared free speech that can be used to influence our politics. Apparently Mexico’s government is similarly business-oriented. According to a story in today’s Wall Street Journal, “Mexico’s top brewer said Thursday it reached an agreement with the country’s anti-trust authority to limit its sales exclusivity contracts with corner stores, bars and restaurants, allowing more room for craft brewers and other players in a lucrative market split by Anheuser-Busch InBev’s Grupo Modelo unit and Heineken N.V.’s Cerveceria Cuauhtemoc Moctezuma.”

In a world where people mattered, a government would tell companies what the rules are and expect them to follow them. Negotiations would be, and frankly should be, unnecessary. But that’s not the way the world works anymore, if indeed it ever did.

More from the Journal piece:

Modelo said in a statement it would cap such agreements to no more than 25% of its points of sale, with the aim of reducing that number to 20% by 2018. The brewer said it would also allow craft brewers to sell their beers in bars and restaurants where Modelo has locked in exclusive pouring terms.

The Mexican beer market, the world’s fifth-biggest according to Euromonitor, is a virtual duopoly, with Modelo brands like Corona claiming around 58% of the 67 million hectoliters of brew sold in Mexico each year, while Cerveceria Cuauhtemoc brands like Tecate account for 41%.

Around half of the beer sold in Mexico each year is channeled through small convenience stores, many of which agree to sell only one of the two brewers’ brands in exchange for branded awnings, signs or refrigerators, as well as discounts on beer purchases, credit and even assistance with local permits.

The country is Heineken’s largest market, accounting for about 16% of sales, while it represents around 13% of AB InBev’s pro forma sales, according to Credit Suisse.

Nice that Modelo will “ALLOW craft brewers to sell their beers in bars and restaurants.” How magnanimous. While the Wall Street Journal, itself as pro-business as they come, ignored the reasons for Modelo’s change of heart, Beer Business Daily reveals why they’ve agreed to soften their monopoly. It’s because the Mexican Federal Competition Commission ruled, 4-1, “that future exclusive contracts that Cuauhtemoc and Grupo Modelo have with retailers be limited in nature.” If they don’t, they could be fined up to 8% of their total income. According to Harry, currently the two biggest Mexican brewery’s “exclusive contracts with retailers account for about 85% of total volume.”

More from Beer Biz Daily:

The CFC ruled that craft brewers (such as Cerveceria Minerva and Primus) that manufacture beer in Mexico (under 100m hectos a year) should have unfettered access to restaurants, bars, and cantinas, and that big brewers’ exclusive contracts with accounts should not exceed 25% of the total outlets they do business with, which is reduced to 20% over five years. Current contracts are allowed to continue in effect without change until they expire.

I find it odd that Heineken apparently responded with a press release saying “that it will abide by the new rules and ‘standardise and simplify some of our future contracts with customers.'” How nice that they let us know they’ve agreed to follow the law. That’s what drives me crazy about the large multinational corporations with economies bigger than many nations. But at least it’s some good news for Mexico’s smaller breweries and their burgeoning craft beer scene.

Beer In Ads #880: Viva El Gran Sabor


Today’s ad is a holiday ad for Cinco de Mayo, for Miller Lite, though I don’t believe it’s very old. The model reminds me of Sofia Vergara from Modern Family, though my wife assures me it’s not. Viva El Gran Sabor translates as “experience the great taste.”

Given that the holiday commemorates the Battle of Puebla, where Mexican forces defeated Napoleon III’s French army in 1862, it’s odd how America has turned it into such a party holiday. Business Insider has an interesting take on How Beer Companies Turned A Minor Holiday Into America’s Favorite Mexican Drinking Day. And while it may be a relatively minor affair in Mexico, here in the States it’s actually an “official” holiday, at least since 2005, when in June of that year, the U.S. Congress sent a proclamation to the President for him to sign “calling upon the people of the United States to observe Cinco de Mayo ‘with appropriate ceremonies and activities.'” Certainly this ad shows the amount of reverence we tend to show for what should be a more solemn holiday. Maybe that’s what Congress meant by “appropriate ceremonies and activities.”

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Mexico Beer

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Today in 1810, Mexico gained their Independence from Spain.

Mexico
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Mexico Breweries

Mexico Brewery Guides

Other Guides

Guild: Asociacion Nacional De Cervez Mexico; Beer Manufacturers Association

National Regulatory Agency: Ministry of Health (Secretaria De Salud)

Beverage Alcohol Labeling Requirements: Labels must include the following information: Name or commercial trademark of the product; Name and address of importer; Net contents (in metric units); Country of origin; Alcohol content by percentage of total volume; Date marking, if applicable; Special instructions for use, storage, or handling, if necessary

Drunk Driving Laws: BAC 0.08% Note: Foreigners with recent (in the past 10 years) drunk-driving criminal convictions are generally refused entry at the border. Mexico’s Immigration Act section 36 considers any foreign drinking and driving outstanding charge or conviction as an Indictable offense (similar to a felony).

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  • Full Name: United Mexican States
  • Location: North America, bordering the Caribbean Sea and the Gulf of Mexico, between Belize and the United States and bordering the North Pacific Ocean, between Guatemala and the United States
  • Government Type: Federal Republic
  • Language: Spanish only 92.7%, Spanish and indigenous languages 5.7%, indigenous only 0.8%, unspecified 0.8% [Note: indigenous languages include various Mayan, Nahuatl, and other regional languages]
  • Religion(s): Roman Catholic 76.5%, Protestant 5.2% (Pentecostal 1.4%, other 3.8%), Jehovah’s Witnesses 1.1%, other 0.3%, unspecified 13.8%, none 3.1%
  • Capital: Mexico City
  • Population: 114,975,406; 11th
  • Area: 1,964,375 sq km, 14th
  • Comparative Area: Slightly less than three times the size of Texas
  • National Food: Mole poblano; Tacos
  • National Symbols: Golden Eagle; Dahlia; Ahuehuete (Taxodium mucronatum); Our Lady of Guadalupe, Castillo de Chapultepec, Teotihuacan, el Zocalo, sombrero, chocolate, mariachis; Eagle, snake and cactus
  • Affiliations: UN, OAS
  • Independence: From France and the UK, January 1, 1960

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  • Alcohol Legal: Yes
  • Minimum Drinking Age: 18
  • BAC: 0.08%
  • Number of Breweries: 34

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  • How to Say “Beer”: cerveza
  • How to Order a Beer: Una cerveza, por favor
  • How to Say “Cheers”: Salud
  • Toasting Etiquette: N/A

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Alcohol Consumption By Type:

  • Beer: 78%
  • Wine: <1%
  • Spirits: 21%
  • Other: 1%

Alcohol Consumption Per Capita (in litres):

  • Recorded: 5.02
  • Unrecorded: 3.40
  • Total: 8.42
  • Beer: 3.96

WHO Alcohol Data:

  • Per Capita Consumption: 5 litres
  • Alcohol Consumption Trend: Stable
  • Excise Taxes: Yes
  • Minimum Age: 18
  • Sales Restrictions: Time, places, specific events, petrol stations
  • Advertising Restrictions: Yes
  • Sponsorship/Promotional Restrictions: Yes

Patterns of Drinking Score: 4

Prohibition: Zapatista Communities will often ban alcohol as part of a collective decision. This has been used by many villages as a way to decrease domestic violence and has generally been favored by women. However, this is not recognized by federal Mexican law as the Zapatista movement is strongly opposed by the federal government.

The sale and purchase of alcohol is prohibited on and the night before certain national holidays, such as Natalicio de Benito Juárez (birthdate of Benito Juárez) and Día de la Revolución, which are meant to be dry nationally. The same “dry law” applies to the days before presidential elections every six years.

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Beer In Art #152: Diego Rivera Self-Portrait

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This week’s work of art is by the renowned Mexican artist Diego Rivera. He was known for his political murals and being married to artist Frida Kahlo, but early in his career, when he was about 21, he painted a self-portrait of himself wearing a big black hat. In the painting he’s sitting a table at what perhaps is an outdoor cafe. He’s also drinking a bottle of beer out of a glass, both of which are also on the table. It’s actually believed to be only the fourth painting Rivera completed. Today it hangs in Mexico City’s Museo Dolores Olmedo Patino.

Rivera_Self-Portrait_1907

I can’t tell what the beer from 1907 might be. It’s a green bottle and looks like the cork was covered in silver foil before it was opened.

You can read Rivera’s biography at Wikipedia, the Artchive or at Diego-Rivera.com. Plus,
<em>Diego Rivera, Art and life is available online. You can also see more of Rivera’s works at Olga’s Gallery, Diego-Rivera.com and the Nader Library.

Alcoholismo

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It appears the U.S. doesn’t have a lock on goofy, over-the-top anti-alcohol propaganda. Mexico has some pretty bad propaganda, too. This comes courtesy of I-Mockery, a humor website, and its founder, Roger Barr, who describes the Mexican Crazy Mexican Monografias: Alcoholismo propaganda:

When it comes to public service announcements, America is really quite tame compared to the rest of the world. While we have the ultra-corny NBC celebrity spots which always end with “The more you know…”, other countries aren’t nearly as sheepish when it comes to displaying the harsh realities of life. This became even clearer to me when I stumbled upon an incredible collection of Mexican monografias posters in the basement of a Philadelphia art gallery last year. Some of them were extremely graphic, and others were pretty friggin’ hilarious… needless to say I purchased one of each.

Barr then goes on, in often hilarious fashion, to translate and comment on each of the images, such as this example below.

alcoholismo

Hmmm, I’m getting a few mixed signals here. From what I can tell, if you become an alcoholic, one of several things can happen to you: a) you can crash your car into a telephone pole, b) you’ll appear in your very own television commercial, or c) you’ll somehow fall into a huge glass of liquor which a giant will then pick up to drink and you’ll die in his stomach. See what I mean? Those Mexicans aren’t gonna shy away from the truth about alcoholism. Harsh reality, people.

And this very surreal piece of art:

alcoholismo-2

“Some bottles of alcohol contain miniature humans who don’t have any genitals, and oh yeah, Death likes to hangout inside bottles too. Kind of like a genie, but the only kind of wish he’ll grant is your wish for the sweet release of death.”

Barr has broken down every one of the nearly two dozen graphic works cautioning people about the dangers of alcohol. And before I get another rash of comments, I’m not making fun of those dangers, just this ridiculous attempt to warn people about them using these illustrations. But take a look for yourself at the Alcoholismo, it’s pretty funny stuff.

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Beer In Art #56: Mark Blanton’s Bohemia Pin-Up

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This Sunday’s work of art is decidedly adult in nature, as much art often is, and is by Mark Blanton. Blanton is a modern artist, a hyper-realist it appears, and also has done a series of pin-up art, which he “created as a tribute to the Sixties’ art movement known as Pop Art and the work of Pop artist Mel Ramos, Pin-up artists Alberto Vargas and George Petty.” The highlighted work today, featuring Bohemia beer, is channeling Mel Ramos so much that for a long time I actually thought it was by Ramos.

Blanton_Mark-Bohemia

Looking through Ramos’ oeuvre revealed, as expected, many, many paintings of nude women with a commercial product of similar size, a pop art style that Ramos pioneered. But as many different variations as Ramos painted, I could not find one featuring a beer. You can see his work at Modernism, Art History, or the Ro Gallery .

Not finding it among Ramos’ works, I started looking elsewhere to identify it eventually finding Mark Blanton, many of whose works are strikingly similar to Ramos.

Given the obvious phallic symbolism of a beer bottle it seems strange that Ramos never did a painting with beer, although he did paint one with a wine bottle. Luckily, Blanton stepped in to fill the void.

You can also see more of Blanton’s Ramos-inspired pin-ups at his website, and also at Pin Up and Cartoon Girls and at the History of Pin Up Art.