Constellation Brands says Mexico breweries still running amid coronavirus outbreak

(Reuters) - Constellation Brands Inc STZ.N, the U.S. distributor of Corona beer, said on Friday its Mexican breweries were still operational and supply to the United States was intact even as rivals suspended production due to the coronavirus pandemic.

FILE PHOTO: A general view shows the construction of the brewery of U.S. company Constellation Brands Inc, in Mexicali, Mexico March 21, 2020. REUTERS/Victor Medina

AB InBev-owned ABI.BR Grupo Modelo and Dutch brewer Heineken HEIO.AS recently suspended their Mexican operations after the country declared a health emergency and ordered the suspension of non-essential activities.

Constellation Chief Executive Officer Bill Newlands said the company was not going against government recommendations.

“I have no comment regarding a competitor and what they are choosing to do or not choosing to do... What I would say is, today... we are operating,” Newlands said on a conference call with analysts.

The brewer’s Corona and Modelo beers have been a huge hit with consumers, especially among the Hispanic population, helping it gain market share in the United States.

Constellation bought U.S. distribution rights for Corona beer from AB InBev’s Grupo Modelo in 2013.

The company operates two breweries at Nava and Obregon in Mexico, where it produces about 34 million hectoliters of beer, according to a 2019 filing.

Newlands said staff were being screened for temperatures at the company’s facilities and have been maintaining social distancing protocols.

“We have changed how we run shifts in our plant to make sure there are no overlaps in case any issues occur with people’s health,” he said.

The company added its production facilities and distributors in the United States, Italy and New Zealand were also operational.

Constellation reported a fourth-quarter profit of $2.18 per share, 41 cents above expectations, according to IBES data from Refinitiv.

Net sales rose 5.9% to $1.9 bln, also beating Wall Street estimates, driven by demand for Corona Refresca, Premier and Modelo Especial beers.

Reporting by Nivedita Balu in Bengaluru; Editing by Ramakrishnan M.