Beer Sales at Local Alcohol Stores: This is not a tariff, but that’s why the main reason for sale is America’s favorite beer
Modero’s first sales decline in more than a decade
Modelo, which became the best-selling beer in the United States a year ago, just reported its first-quarter sales to retailers, according to Fortune’s revenue. The company said it blamed increased anxiety demand from Hispanic consumers, about half of Modelo’s U.S. customers.
Fear in Hispanic community is causing losses
“If that consumer has concerns, problems, etc., that’s a big side for us,” Zodiac CEO Bill Newlands said in an interview with the Wall Street Journal, also noting that fear among Latino shoppers has intensified after increasing immigration enforcement.
Analysts and distributors revealed that in major beverage companies’ markets such as Southern California and Texas, many immigrants are avoiding local liquor stores and smaller retailers in Hispanic communities and instead shifting to a larger chain, which is unlikely to target immigration enforcement because it is huge.
“At present, many consumers in the Hispanic community are very worried,” Newrans stressed. He also noted that “social activities are often the case where Hispanic consumers enjoy beer, and are currently declining due to these general concerns.”
Also read: Countries should learn from Ireland how to deal with Donald Trump’s tariffs; this is what small European countries do
Tariffs worsen the situation
According to Fortune, Huge, the constellation also competes with the recent tariffs imposed by Trump. All imported canned beer and empty aluminum cans will take effect 25% on April 4. While the beer itself is not taxed directly, as Modelo, Corona and Pacifico are exempt from tariffs on Mexico’s imports, their packaging of aluminum cans are not reported. This could cost the company up to $1 billion a year, according to Fortune. According to the report, the composition has reduced earnings forecasts in the coming years. The company now reports that it now expects sales of only 2% to 4% per year by fiscal 2026, down from the previous estimate of 6% to 8%.
FAQ
What caused the decline in Modelo sales?
There are various things, mainly concerns about immigration enforcement in Hispanic communities and the rising costs due to tariffs.
Why does immigration enforcement affect beer sales?
About half of Modeo’s American customers are Hispanic. As the crackdown on immigration intensified, many avoided smaller local liquor stores, and the Modelo sold well.
