USA: Trump’s immigration crackdown hitting Modelo and Corona beer sales

President Donald Trump’s deportation push is spooking Latino customers and hurting beer sales, according to Modelo and Corona owner Constellation Brands, CNN reported on April 11.

Since taking office, Trump and his team have enacted aggressive measures to crack down on immigration, including invoking a rarely used wartime authority. The Trump administration has made some missteps in recent weeks, including mistakenly deporting a Salvadoran man.

About half of Constellation’s US customers are Hispanic, and some have stopped going out to restaurants and gathering in large groups out of fear of being swept up in deportations, Constellation Brands’ CEO William Newlands said on a conference call with analysts Thursday.

“A lot of consumers in the Hispanic community are concerned right now,” he said. “Social gatherings, an area where the Hispanic consumer often consumes beer, are declining today as part of these overarching concerns that they have.”

That pullback contributed to a 1% drop in Constellation’s beer shipments last quarter. Constellation said that the slowdown in beer sales was most pronounced at retailers in neighborhoods with large Hispanic populations.

In an interview with the Wall Street Journal, Newlands said some Latino shoppers are shifting their shopping to large retail chains in an attempt to blend into a crowd. That means they are no longer frequenting smaller convenience stores or bodegas that primarily serve Hispanic consumers.

Trump’s immigration policies are another source of pressure on companies, in addition to tariffs that caused economic turmoil and threaten a recession.

Burlington, Foot Locker, Colgate-Palmolive, and Monster have all noted sluggish sales among Hispanic customers in recent weeks.

“There obviously is an impact on Hispanic demand, as we’ve seen, lower traffic from Hispanic consumers,” Colgate-Palmolive vice president John Faucher said at a conference last month.

So far this year, discretionary purchases among Hispanic consumers have fallen at a faster clip than non-Hispanic customers, according to market research firm Circana.

A “consistent theme we have heard over the last several months has been mounting pressure among [Hispanic consumers] stemming from concerns on immigration policy,” Nik Modi, an analyst at RBC Capital Markets, said in a note to clients last week. “This has manifested in pull back from retail.”

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .