包括周二的下跌在内，Constellation Brands imports all its beer from Mexico, including Modelo and Corona. In the first half of this year, beer accounted for 86% of Constellation Brands' sales.
According to the智通财经APP, on Tuesday, when President-elect Trump announced that he would impose a 25% tariff on commodities imported from Mexico once he took office, Constellation Brands (STZ.US) shares fell by 3.5% that day.
Constellation Brands imports all its beer from Mexico, including Modelo and Corona. In the first half of this year, beer accounted for 86% of Constellation's sales.
Including the drop on Tuesday, Constellation Brands' stock price has cumulatively fallen over 3% this year. This brewer has a market cap of about 42 billion dollars.
A research report released on Tuesday by wells fargo & co analyst Chris Carey showed that if Trump's proposed tariffs are implemented, Constellation Brands' sales cost would increase by about 16%.
To offset the tariffs, Constellation Brands may raise prices. Even if consumers are tired of inflation, this brewer has some pricing power. Last year, Modelo Special replaced Bud Light as the best-selling beer in the usa.
Constellation Brands is unlikely to move its beer production out of Mexico. Due to a 2013 antitrust agreement reached between Anheuser-Busch InBev, Grupo Modelo, and the US Department of Justice, Anheuser-Busch InBev had to sell Modelo's US operations to Constellation Brands.
Analyst Bill Kirk from Roth MKM stated in a research report that the agreement requires constellation brands to produce beer brands made by anheuser-busch inbev.
In recent years, constellation brands has invested billions of dollars to expand its production capacity in mexico.
It is still unclear whether Trump will actually implement his tariff plans. During his previous term, he proposed a 5% tariff on goods imported from mexico and planned to increase the tariffs to 25%, but those tariffs were never implemented.
In 2020, Trump signed a new trade agreement with mexico and canada, making it law.
In a post on his social media platform Truth social on Monday evening, Trump also threatened to impose an additional 10% tariff on goods from china and a 25% tariff on imported goods from canada.
Due to concerns over tariffs, the stock prices of auto manufacturers including general motors and stellantis also fell on Tuesday.
