Partner Alejandro Gómez Strozzi was quoted in the El Economista article, “Cancelar planta de Constellation violaría el TLCAN,” about Constellation Brands stopping construction of a beer production plant in Mexico because it would violate the NAFTA investment chapter.
He said the measure would be an equivalent to indirect expropriation and considers that this development has a direct impact on Mexico’s “attractiveness” for foreign direct investment as it sends a negative signal of uncertainty for investors.
He noted that it still needs to be be determined whether this dispute would be resolved under NAFTA or the USMCA.
Constellation Brands is building a brewery in Mexicali, Baja California. It has already invested 900 of 1,400 million dollars in the project. Due to an alleged water insufficiency in the region and a questioned local survey carried by the authorities, the Mexican government cancelled the project denying the required water permit.
36,781 citizens participated in the survey (5% of registered voters in the community) – 76.1% voted against and 23.2% in favor of the project. “The National Water Commission will deny the water permit,” said Diana Alvarez, undersecretary for Democratic Development, Social Participation and Religious Affairs.
The López Obrador administration indicated that the federal government promotes and guarantees private investment, while protecting the environment and the rights of the population.
Since 2013, Constellation Brands has announced investments in Mexico of $4.6 billion dollars, according to Cepal. The company has been expanding the production capacity of the Nava, Coahuila plant, and in 2017 managed to go from 10 million to 25 million hectoliters.