September 23, 2019 / 4:49 PM / 23 days ago

Mexican president criticizes Constellation's brewery in Mexican border city

MEXICO CITY (Reuters) - Mexican President Andres Manuel Lopez Obrador on Monday criticized the location of Constellation Brands Inc’s planned brewery in the northern border city of Mexicali, in the latest swipe at a major investment agreed before he took power.

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador looks on from a balcony during a military parade to celebrate Independence Day at Zocalo Square in Mexico City, Mexico September 16, 2019. REUTERS/Henry Romero

The massive, partly-built brewery has been a bone of contention with local protest groups, which argue it will cause water shortages in one of the driest regions of the country.

Lopez Obrador told a regular news briefing that authorities should not be granting permits to create dairy areas and build breweries in the north of Mexico where water is scarce.

“Just imagine the authorization they gave to build a big plant to produce beer in Mexicali. No,” the president said, without mentioning Constellation Brands by name.

“If someone wants to produce beer - in case it’s necessary - in the southeast, that’s where the Papaloapan is, the Grijalva, the Usumacinta,” he added, naming several major rivers in Mexico. “That’s where 70% of the country’s water is.”

Lopez Obrador raised the subject of the brewery when discussing what his government was doing to protect the environment. In March, he said he would have a study carried out on how the Mexicali plant affected water supplies in the area.

The president did not speak further on the brewery, but said there should be more “horizontal development” in Mexico, where the south has long lagged behind the north economically.

Taking office in December, Lopez Obrador pledged to revive Mexico’s sluggish economy. But his cancellation of a new Mexico City airport and criticism of investments agreed under the previous administration has alarmed business leaders.

Constellation, the U.S. producer of Corona and Modelo beers, has said the plant will not threaten local water supplies. The company unveiled the project in January 2016 with a price tag of $1.5 billion, saying it would take 4 to 5 years to build.

A veteran leftist, Lopez Obrador maintains the previous six governments were tainted by “neo-liberal” economics that served to enrich a corrupt political and corporate elite.

Last month he said he had forced a group of infrastructure companies to accept reworked terms for several natural gas pipeline contracts, saving the public $4.5 billion.

Reporting by Dave Graham; Editing by Chris Reese

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