Why you can't buy a Miller Lite or a Coors in a Mexican bar.
David Agren, Special for USA TODAY
Jesús Briseño is a Mexican entrepreneur, brewing craft beers like pale ale, stout and a pilsner named for Jesús Malverde, the patron saint of smugglers and drug dealers.
But often it's not Mexico bars that sell his beer but U.S.-based outlets here like Wal-Mart and 7-Eleven.
The reason has to do with Mexico's system of monopolies that are allowed to secure exclusive rights to major industries and products such as telecommunications, broadcasting, cement, even beer. Mexico's two largest brewers use exclusivity contracts to prevent all products but their own from being sold in nearly all of Mexico's bars and restaurants.
Mexico's new president Enrique Peña Nieto says he wants to grow the economy by loosening the hammerlock that big companies have on markets here. But it won't be easy.
A proposed measure in the Senate would open up telecommunications to competition. The sector, which includes Mexico's cellphone industry, is dominated by the world's wealthiest man, Carlos Slim. The Senate measure would allow foreign competition in the industry and create an autonomous telecom regulator with teeth.
It would also allow for the establishment of new on-air TV channels to compete with broadcasting giant Televisa and TV Azteca, which together control more than 90% of the Mexican market.
"It will arrive to encourage more competition in this sector, in favor of more investment, eventually from abroad," Peña Nieto said recently.
The brewing business is a good example of how Mexican conglomerates often focus on keeping out competition rather than competing for customers, preventing innovation, price reductions and entrepreneurship.
Briseño made beer in his basement before starting Guadalajara-based Cervecería Minerva using the equipment of a failed Philadelphia microbrewery. But he found that most outlets for his products has signed exclusivity contracts with Mexico's biggest brewers in exchange for financial incentives such as free refrigerators and low-interest loans.
Briseño estimates 95% of potential sales points in Mexico are off-limits to his products.
"For small businesses, especially restaurants, this is a very attractive financing method," Briseño says.
He is not the only one to complain.
SABMiller, which produces Miller beer, has been in court for years in Mexico alleging that Grupo Modelo SAB and Cuauhtémoc Moctezuma — Mexico's biggest domestic producers — are illegally blocking consumer choice in what is the world's sixth biggest beer market.
Grupo Modelo, half-owned by Anheuser Busch-InBev NV, produces Corona, Modelo, and Pacifico beers and exports them freely to the United States. So too does Cuauhtémoc Moctezuma, which is owned by Heineken NV and produces Dos Equis and Tecate.
But the brewers have fought the legal attempts to overturn exclusivity deals in Mexico that keep out U.S.-produced beers.
Mexico's competition commission is due to rule on the propriety of the exclusivity deals this spring. Spokeswomen for Cuauhtémoc Moctezuma and Grupo Modelo did not respond to interview requests.
Some stores and high-end restaurants and pubs have been stocking craft beers. But for now, the contracts remain standard practice.
The inducements for signing exclusivity contracts are significant and include signage and furniture. But the most widespread inducement is cash -- no small matter in country where bank lending is low and interest rates for business loans are high.
In some parts of Mexico, money from an exclusivity contract allows bar owners to pay for liquor licenses, says Rick Ortega, export sales manager at Cucapá Brewing Co. in Mexicali — which increasingly sends its beers into neighboring California.
"It's an open enterprise in the U.S.," Oretga says. "You have a lot more points of sale."
Exclusivity contracts date back decades in Mexico, emerging originally in northern states where liquor licenses were scarce and expensive and bought by bar owners with a brewery's financial backing, says Alan Alanis, Latin America food and beverage analyst with JP Morgan.
Such arrangements are not synonymous with exaggerated profits, he says.
"The most profitable beer markets are Brazil and the U.S. and exclusives are less than 5% of the market," he says.
Gilbert Nielsen, director of Cervecería Calavera, a microbrewery in suburban Mexico City, says Mexico's big brewers also maintain dominance the way monopolies in the United States once did - by controlling supplies. In the case of beer, the big chain monopolies own the country's malting companies.
But he insists a culture of consuming craft beer is building in Mexico despite the difficulties. The number microbreweries climbed to 46 in 2012 from just 20 in 2011.
"Public pressure" is changing consumer tastes will eventually put an end exclusivity contracts, he say.
But many bar owners appear indifferent to the complaints.
Umair Khan, co-owner of the Black Horse bar in Mexico City's popular Condesa district, says Mexico's two big brewers must still court bar owners and compete for contracts. And despite the lack of domestic competition he can offer 43 different imported beers.
Cheat yourself if you have never tried Shiner Bock, brewed in the little town of Shiner, Texas;
Bock reflects the tradition of genuine Bavarian beers as a brew only a craftsman like Kosmos Spoetzl, trained in the "Old Country," could bring to life. With its deep amber color, distinctive rich flavor and full body, Shiner Bock demonstrates the care of a handcrafted brewing process to bring forth a mellow taste free of the bitter aftertaste found in many micro, specialty and imported beers. Just think of it as Shiner smooth.
Words are powerful weapons, be careful how you use them.
Sam Adams would cost an arm and a leg at a bar down here. You can actually buy it in a bar here in Monterrey now that I think about it. It is a very popular bar in one of the plazas here in Monterrey. They sell beers from all over the world - including America. Not sure how that work after reading that article. Sounds like some bars get special licenses.
I like dos equis too, but those Minerva beers DD mentioned in the first post are pretty good, also some small brand from Hidalgo I think, the ones who make la catrina, hidalgo and jaguar, good stuff, cool bottles too, I tried once the Mexican duff, but I believe they are not making it anymore
There's nothing like drinking some ice cold caguamas of Carta Blanca while hanging out on a corner with a bunch of cabrones from your colonia . Always smart to have a wheelbarrow on hand to haul the drunks home .
Re: Why you can't buy a Miller Lite or a Coors in a Mexican bar.
Agreed. I can't wait to get back up north this summer and chug down an ice cold pint of Granville Island lager. The unfortunate thing, though, is how the Canadian government taxes the hell out of alcohol. Enjoy every sip because you're paying more than you should for it.
If you go down to Baja or even T.J. there are some very excellent Mexican microbrews like Casta ( Scottish Style Ale and Czech Pilsner ) or Cucapa ( Imperial Stout ). But the best Mexican premium cerveza is Bohemia . Don't take my word since I'm not some fancy beer connoisseur but a puro pinche cabron who loves to drink cold beer , chase tail, and raise hell .
Re: Why you can't buy a Miller Lite or a Coors in a Mexican bar.
Haven't had a Boehemia in a while but last I remembered it was mierda. Give me a Weihenstephaner from the oldest brewery in the world. Warsteiner, Koenig Pilsner, even a Rasputin over that water-down shite Shiner Bock makes here in Texas too and all that Corona and XX swill. How about a Butthead to get plastered quick? La Rosa from Italy, or for the wannabe-gorilla in you how about a banana bread beer by the good folks at Wells? It'll slap you in the back of the head just for looking at it.
Damn, and it's Sunday too. Right now my options at the gas store are not looking too good.