Immigration crackdown triggers sales drop for Modelo beer

In the United States, Constellation Brands, the brewer of Modelo, reported a decrease in quarterly sales for the first time since its acquisition in 2013. The drop, which amounted to about 1%, is largely attributed to the Trump administration's immigration policies that have instilled fear among Hispanic customers, who make up about half of Modelo's consumer base. Many of these customers are avoiding shopping at liquor stores and supermarkets due to concerns about identification checks and potential raids by immigration authorities, particularly in states like Texas and California where a significant immigrant population resides. The aggressive stance on immigration, characterized by numerous raids and deportations, has created an atmosphere of unease. This apprehension has led many Latino consumers to shift their shopping habits from smaller convenience stores or bodegas to larger retail chains, where they feel less conspicuous. The CEO of Constellation Brands, Bill Newlands, indicated that this shift has directly impacted beer sales, which have seen a slump as a result. Analysts have noted that this behavior reflects mounting pressure among Hispanic consumers driven by fears surrounding the current immigration environment. Furthermore, the alcoholic beverage industry faces additional challenges due to tariffs imposed on aluminum imports. Recent tariffs by President Trump, which include a 25% levy on aluminum used for beer cans, may lead to substantial financial burdens for Constellation Brands, potentially costing the company approximately $1 billion annually. Although Modelo and similar brands may be exempt from these tariffs, the overall economic impact could still pressure prices and distribution networks. Constellation Brands has indicated that even before these tariffs, the cost of their beer products increased by about one to two percent annually. As a result of these multiple stressors—a declining Hispanic consumer base, shifting shopping behaviors to larger retail outlets, and rising production costs—Constellation Brands faces an uncertain future in the competitive beer market. This combination of factors reflects broader trends in consumer behavior and economic pressures, suggesting that the beer market could continue to struggle without significant changes in the current political and economic landscape.