Market Information
Latin America and Caribbean

Overview of the Mexican Malt Sector

Prepared by Agriculture Section - Alejandro Ruiz, Commercial Officer Canadian Embassy, Mexico

There is a large demand for malt in Mexico, which comes mainly from the domestic beer industry.

Mexico is among the top 10 producers of beer around the world. During the period 1998-2002 the production of beer in Mexico showed an increase of 16%, jumping from 5.5 billion litres to 6.3 billion litres.

The beer industry in Mexico is dominated by two companies: Grupo Modelo, which has a market share of around 56.4% and FEMSA Cerveza with a share of 43.6%. These two companies are the largest demanders of malt.

Mexican consumers prefer beer above other alcoholic beverages mainly due to its low price. In 2002 the annual per-capita consumption of beer in Mexico was estimated at 50 litres.

Source: INEGI

Over the last few years the imports of malt have been growing in order to satisfy the growing demand from the domestic beer industry.

During the period 1998-2002 the Mexican imports of malt grew from 118,321 tonnes with a value of US$34.6 million to 126,051 tonnes with a value of US$44 million.

The U.S. was the main supplier of malt to Mexico during the analyzed period with a market share of 74%, followed by Canada with a share of 26%.

Source: Mexican Ministry of Economy.

Source: Mexican Ministry of Economy.

During the analyzed period the exports of Canadian and U.S. malt to Mexico were subject to tariff rate quotas (TRQs) as established under the provisions of NAFTA. However, as of January 1, 2003 these TRQs were completely eliminated, providing duty free access to Canadian and U.S. malt into the Mexican market.

Canada has taken advantage of the new market access conditions in Mexico and during the first 8 months of 2003 increased its exports up to 76,109 tonnes with a value of US$23.5 million, which represented an increase of more than 300% from the total exports reported during the first 8 months of 2002.

On the other hand, during the first 8 months of 2003 the U.S. exports of malt to Mexico registered a decline of 79.4% from the exports reported during the first 8 months of 2002.

It is important to note that Canadian exports of malt to the world jumped from US$139 million in 1998 to US$154.4 million in 2002. However, only around 8% of those exports were sent to Mexico, which indicates that still there is a large potential to increase exports of malt to the Mexican market.

Source: Statistics Canada and Mexican Ministry of Economy.

The two main beer producers in Mexico have announced multimillion dollars investments to increase their production capacity over the next few years. The expansion of the Mexican beer industry and the new market access conditions under NAFTA provide good opportunities for Canadian exporters of malt in the Mexican market.