The world’s largest producer of tequila Becle (owns the brand Jose Cuervo) may face serious problems due to the plans of US President Donald Trump to introduce trade duties on imports of goods from Mexico. This writes Bloomberg.
The United States is the main market for Becle products and the world’s largest consumer of tequila. So, North America provides more than half of the company’s annual income. In recent years, amid growing consumption of the beverage in the United States (the figure jumped 8.5 percent in 2018 alone), Becle managed to increase its annual income by almost two times compared to 2015.
However, the business was under threat after the American president expressed his intention to introduce trade duties on Mexican goods, if the authorities did not take measures to curb the flow of migrants heading to the United States.
Becle is one of the few Mexican beverage manufacturers that is exported to the United States. Thus, the introduction of duties by Washington will directly hit this business and in the near future will affect sales. As the agency notes, the situation would have been saved by the decision of the American side not to include tequila in the list of goods subject to trade duties, on the basis that «tequila, by definition, must originate from Mexico.»
Becle controls about a third of the global tequila market. The company’s net profit in 2018 amounted to almost $ 200 million.
In May, Trump announced the introduction of a five percent duty on all goods from Mexico, if the government does not stop the flow of illegal migrants in the United States. Restrictions should come into force on June 10th. Tariffs will continue to grow by five percent every month if the Mexican government does not stop the flow of illegal migrants to the United States. As a result, by October 1, duties will reach 25 percent.