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Modelo demonstrates how greater regional integration can strengthen a company’s competitive position internationally.
As a result of NAFTA, Modelo complements its supply of high quality barley, through duty-free imports from the U.S. and Canada.
NAFTA has fostered a positive environment for agro-industrial and agricultural producers in North America. Market access has encouraged producers to become more competitive and efficient.
Under NAFTA, all quantitative restrictions and tariffs on covered agricultural trade between Mexico and its trading partners were eliminated after the scheduled 15 year phase-out. Today, Mexico enjoys free access to and better prices for agricultural crops and agro-industrial machinery from the United States and Canada—a combination that has made Mexico’s agricultural industry more competitive.
Modelo has fully taken advantage of the opportunities afforded by NAFTA, a measure that has contributed to the company becoming a trusted and leading producer of Mexican premium beers around the world. Since 1925, Modelo has been earning a strong reputation as a quality beer producer in Mexico, and now has become a commanding force in the highly competitive global alcohol beverage market. In the United States, Modelo’s Corona ranks first among imported beers.
As a result of NAFTA, the Mexican beer producer is able to import barley duty-free from the U.S. and Canada, meeting the high-quality product standards that serve as a complement to our supply of barley, which is predominantly sourced domestically. In fact, because of growing beer exports, domestic barley production has also increased significantly since NAFTA was enacted.
Modelo has also invested in a state-of-the-art malt plant in Idaho. This facility helps supply the company’s needs for malted barley, benefiting regional growers with long-term supply contracts to help meet the yearly demand for 6.5 million bushels of barley.
The NAFTA partnership is strengthening the supply chain to and from Modelo’s seven brewing plants in Mexico, which have a total annual installed capacity of 60 million hectoliters, and is pushing growers and producers to meet the needs of an increasingly sophisticated world beer market.
Modelo’s expansion plans across North America include joint business opportunities with other industry leaders. Besides its partnership with Anheuser-Busch, which has created a mutually beneficial gateway to access markets in both the United States and Mexico, in 2007 Modelo entered into a joint venture with Constellation Brands, one of the world’s largest international wine and liquor companies, to handle imports into the United States. Likewise, Modelo signed an agreement with Canadian brewery Molson to improve distribution in that country, making Modelo’s beers more easily available in all Canadian provinces and territories. Likewise, Modelo imports the Anheuser-Busch brands as well as Carlsberg beer into Mexico.
Modelo illustrates how further regional integration empowers companies to produce better foods and to position them as stronger competitors at the world scale. Currently, Modelo’s beers are exported to 154 countries; it is the seventh-largest beer producer in the world and is widely perceived as a global leader.
Source: Government of Mexico