Beer transnationals are sucking Mexico dry

While the country’s inhabitants go without clean drinking water, Mexican politicians have privatised and sold its water to giant breweries, which exploit this life-sustaining resource to make massive profits.

Mexico is the biggest beer exporter globally, but it barely has enough water for its residents and farmers. Experiencing long-lasting droughts, the country, which is half desert, has become a cheap place for transnationals to consume its remaining water, then send the products and profits to wealthier regions.

In 2018, Mexico exported almost 40 million hectoliters of water, with 80% of that going to the United States. Mexico’s beer production is monopolised by two transnational companies: AB InBev, which acquired Grupo Modelo in 2013, and Heineken, which acquired Cuauhtémoc Moctezuma Brewery in 2010. Between them, the companies own 97.5% of the domestic consumption market. The Tecate brand, owned by Heineken, is one of the fastest-rising beer brands in the US, and Corona Extra, owned by AB InBev, is in the global top 10.

Heineken uses Mexico because of how profitable it is. “The country has a young population, natural and human resources, and macro-economic stability,” Dolf van den Brink, president of Heineken Mexico, said. The company built its seventh brewery in Northern Mexico last year, choosing the location because it was close to the US, and they could easily export Tecate and Dos Equis brands to US consumers.

Let them drink beer

Here in Puebla, in the centre of the country, most residents only receive water twice a week for 15 minutes at a time, forcing us to severely ration water use. A new Heineken factory, currently being built 15 minutes from the city centre, will make that even worse. The company is taking water directly from the domestic pipe network, rather than the industrial water supply, as laws mandate.

Omar Jimenez Castro, a water rights activist and lawyer who has taken Puebla’s private water company Aguas de Puebla to court and won in nearly 400 cases, reported that drainage in that area of the city was at the point of collapse and that it couldn’t cope with industrial use from the Heineken factory.

Locals have been documenting the excavations and operations the company has carried out in the area with photos and video since June of last year, and have noted that Heineken’s pipes redirect water from their domestic pipes.

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“We’ve spent nine months monitoring what they are doing, and watching over the construction. They’ve told us now that the water pipes they are installing are just for two toilets for the workers, but the pipes are huge,” Raul Rojano, a local opposed to the factory told me as we tried to inspect the Heineken site. However, since protests and legal steps were taken against it, the company has erected a tall brick fence topped with barbed wire to stop locals from observing.

“They have something to hide,” one local commented. However, Jimenez doesn’t just blame Heineken. The “three levels of government – federal, state and municipal ” are at fault for allowing a private company to be responsible for the water supply, he told me. “On a daily basis they systematically violate human rights,” he said, referring to the water shortages and mass disconnections so that Aguas de Puebla can collect more fees and also send more water to transnationals like Heineken and Walmart.

Meanwhile, another Heineken factory inaugurated last year in Chihuahua, on the border with the US, is using the amount of water that would supply 200 000 houses. Residents there have become so desperate for water that enterprising individuals are selling plastic containers of water off the back of their trucks. Northern Mexico, with extremely hot summers and little rainfall year-round, suffers from ongoing water supply issues. Due to over-exploitation, Chihuahua only has about 10 years of water left, and activists, farmers and academics have spoken out against local authorities there, saying they put transnational companies first.

Millions without water

The water situation in Mexico is already dire, with pipas (privately owned oil-tank-like trucks that pump water into people’s water tanks) the norm. Some 44 million people in Mexico don’t have a daily supply of water, with an additional 12 million people who don’t have any piped water in their home. Of the water that does reach homes, most of it isn’t drinkable, with 80% of bodies of water in Mexico contaminated by industrial waste. A further 40% of urban water is lost due to leaks and unmaintained pipes.

And in other parts of Mexico, the lives of whole communities are at stake due to dams built for beer companies. In Zacatecas, a massive Corona plant (owned by AB InBev) which produces 19 million bottles of beer daily, will benefit from a dam built on a river in a valley where ejidatarios (shareholders of common land) live. The dam, according to academics and activists, would flood and displace those living there, while draining most of the river which supplies 19 other communities. Investigations have concluded that the best quality water is given over to companies in the area, while the most contaminated water with the highest concentrations of heavy metals is distributed to the most marginalised barrios.

Residents near the new dam say they have been beaten by police and have received threats that they would be removed from their territory “like rats” (ironically, a term meaning thieves). As it is, 236 suburbs in Zacatecas have already been suffering severe water shortages for the past five years thanks to the Corona plant, according to the Popular Front of Struggle of Zacatecas (FPLZ), and the new dam will only make things worse.

Making beer wastes water

The amount of water that goes into producing a gallon of beer (3.7 litres) is key to why beer companies are having such devastating effects. Beer is 90% to 95% water, and while only 10 gallons of water (37 litres) are required to produce one gallon (3.7 litres) of beer during the brewing process, 590 gallons (2 233 litres) total are required for that single gallon, as the hops and barley crops require copious amounts of water.

The Nava brewery, for example, is leaving the municipality of Zaragoza, in Mexico’s northern Coahuila state, without water. Built by Grupo Modelo, then bought by US transnational Constellation in 2013, the plant uses 1 200 liters of water per second – meaning in a 12-hour day it uses up one week of water for 86 000 homes.

While locals pay taxes to their government to have their water stolen, the government then gives aqueducts away to private companies, academic Isidrio Paz told Regeneracion. He described how farmers in the north are being harassed to sell their land and water rights, while “their rights to sow are being denied, and the public resources that correspond to them are being cancelled or denied”. Meanwhile, he also alleged that legislators in Coahuila received millions of pesos each in 2016 to vote in favour of a law that privatised water, while the state government and Constellation also put an end to a law that would have supported artisanal and local beers.

Constellation is building another plant in the north, in Mexicali, Baja California, which will use up a large amount of the Colorado River’s water – currently destined to agricultural production of vital crops like cotton. It will send all of its beer to the US, leaving Mexicans with no benefit at all, but a lot less water. The group Mexicali Resiste has demanded the state water company stop Constellation from committing “malicious crimes” and stealing water without legal permission. They accuse the company of violating the human right to water in the middle of a declared drought.

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The list goes on. In Hidalgo, in the centre of the country, a new Grupo Modelo plant will be using up water that would typically supply 182 000 locals, and in the medium term it is expect that people living in five nearby municipalities will be left completely without water.

The beer transnationals are just one industry of many that are exploiting Mexico’s resources, while giving nothing back. For Juan Villoro, a Mexican journalist and writer, politicians here are complicit with US companies, as they allow them to set up in important natural areas and ultimately destroy them. According to the Observatory of Mining Conflicts, there are almost 50 conflicts between mining transnationals and indigenous peoples in Mexico.

Here in Puebla, despite his tenacity in standing up for water rights, Omar Jimenez tells me he isn’t optimistic about the future, “Because the private water company is at the service of the economic powers like the transnational auto industries, beer companies, clothing companies, and so on, we can’t rule out more companies coming here in the future and taking water designated for domestic use.”

This is an edited version of an article first published in Towards Freedom.

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