Beer globalisation hits Latin America

Issue 

On a pleasant autumn day in 1890, the Cuauhtemoc brewery was founded in Monterrey, Mexico. This brewery went on to become Mexican Economic Development Inc. (FEMSA), brewing such beers as Dos Equis, Tecate and Sol.

Recently, the Dutch brewing giant Heineken bought FEMSA, bringing over half of the world's beer production into the hands of just four mega-corporations, Reuters said on February 8.

Abraham Nuncio wrote of the merger in the February 15 Mexican La Jornada: "Just a bit more globalisation and we will all be lost."

The concentration of beer production into the hands of a few brewers is reflective of what is happening in economies across the globe.

Homogenisation of culture and the centralisation of wealth and power naturally follow corporate globalisation.

Though the recent merger in Mexico is emblematic of this profit-driven trend, homegrown examples of grassroots alternatives have emerged in the kitchens and coca fields of Colombia and Bolivia.

Consolidation

A number of major beer corporate mergers have taken place in recent years, the largest being Belgian-Brazilian InBev's purchase of Anheuser-Busch for US$52 billion in 2008.

The January 11 Wall Street Journal said this "wave of consolidation in the global beer market" has "put pressure on smaller brewers to find larger homes".

Subsequently, Heineken purchased FEMSA, the brewer of just under half of Mexico's beer, for $5.7 billion.

The January 12 New York Times reported Heineken chief executive Jean-Francois van Boxmeer said this purchase will help his company become a "more competitive player in Latin America, one of the world's most profitable and fastest-growing beer markets".

Business Times reporter Chew Xiang met van Boxmeer at the company's Singapore office on a rainy day in December.

In a February 17 piece, Xiang said that although cold beer was available at an office bar, van Boxmeer chose to drink coffee instead as he was recovering from a long flight.

The executive told Xiang: "In the niche of premium international brands, we want to stay number one in the world.

"And in each market, we want to be number one or number two."

Jose Antonio Fernandez, who became chairperson of Mexico's FEMSA in 1995, is still known by a nickname from his youth: "the Devil Fernandez".

From the beginning of his work for FEMSA, Fernandez focused on other aspects of his business besides beer, namely the company's convenience stores and bottling operations.

The October 21 WSJ reported Monterrey corporate lawyer Ernesto Canales saying: "The Devil has a love affair with his two new babies, Coca-Cola and Oxxo [convenience stores]."

Since 1993, when the company became partners with Coca-Cola, FEMSA has become the second largest Coca-Cola bottler in the world. Following the sale to Heineken, Fernandez said he planned to focus on expanding his Coca-Cola bottling business.

Bolivian coca leaves

However, some new competition for Coca-Cola — and therefore, the Devil Fernandez — has emerged in Bolivia.

In January, Bolivian president, and former coca farmer, Evo Morales announced plans for the production of a soft drink called Coca Colla.

The name's play on words is a nod to indigenous culture in Bolivia, where about 60% of the country identifies as indigenous; the term "colla" refers to indigenous people living in the western highlands of Bolivia.

The drink would be based on actual coca leaves produced legally by coca farmers in the country. Coca has been widely used for medicinal and cultural purposes throughout the Andes for centuries.

The drink may be produced exclusively by the state or in partnership with coca growers, and would have a label similar to that of Coca-Cola.

Other Bolivian products like tea, chocolate, shampoo, cookies and liquor are made with coca. Bolivia's vice-minister of coca and integrated development Jeronimo Meneses said: "Coca Colla will be part of the industrialisation of coca production."

AFP said on January 10 that Bolivia's new constitution, passed in a referendum in January 2009, officially states that coca (which can be processed into cocaine) is not a drug in its natural form, and recognises the leaf as a "cultural heritage, a natural and renewable resource of biodiversity in Bolivia and a factor of social cohesion".

Chicha resurgence

Another development in Latin America also challenges the type of corporate globalisation Heineken and the Devil Fernandez are pushing.

Chicha, a homemade alcoholic drink typically made from corn for centuries throughout the Americas, is enjoying a comeback in major Colombian cities, Inter Press Service said on December 21.

Many people, particularly students, are drawn to chicha as an alternative to beer from massive commercial producers.

In Bogota, Gloria Cecilia Delgado sells chicha that she prepares based on a recipe from her grandmother and advice on the brewing process provided by an indigenous man who visited her shop years ago.

Delgado stirs the ingredients in a ceramic pot, and believes that the mood of the brewer, particularly "the love they put into it", has an impact on the flavor, IPS said.

Throughout the 20th century, campaigns and bans were initiated against chicha, in part due to pressure from competing beer and soda companies in Colombia.

Part of the desire for prohibition was based on the fact that local indigenous people and workers would gather in chicha bars to complain about their working conditions and low salaries.

IPS cited historians Oscar Ivan Calvo and Marta Saade writing on the chicha bans in Colombia in the 1940s: "The elites feared the existence of recreational spaces where the popular social classes, discontented with their poverty, came together."

In contrast, Heineken's purchase of FEMSA in Mexico signals a global move not just toward the consolidation of beer brewing, but of political and social power as well.

Nuncio lamented the corporate drive in Mexico toward a national economy that "falls into the hands of the monopolies that control the global market and loot the riches and the sovereignty of the country".

[Reprinted from Towards Freedom. Benjamin Dangl is the editor of Towards Freedom and co-author of the forthcoming book Bottoms Up: A People'a Guide to Beer (PM Press).]

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