Beer Globalization in Latin America

by BENJAMIN DANGL

On a pleasant autumn day in 1890 the Cuauhtémoc brewery was founded in Monterrey, Mexico. This brewery, which also specialized in ice production, 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. One Mexican columnist wrote of the merger in La Jornada, “Just a bit more globalization 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. Homogenization of culture and the centralization of wealth and power naturally follow corporate globalization. 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.

Riding the Beer Wave of Consolidation

A number of major beer company mergers have taken place in recent years, the largest being Belgian-Brazilian InBev’s purchase of Anheuser-Busch for $52 billion in 2008. According to the Wall Street Journal, 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.

Jean-François van Boxmeer, the chairman and chief executive of Heineken, 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. Though 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.”

The Devil Fernández and Bolivian Coca Leaves

Jose Antonio Fernández, who became chairman of Mexico’s FEMSA in 1995, is still known by a nickname from his youth: "the Devil Fernández." From the beginning of his work for FEMSA, Fernández focused on other aspects of his business besides beer, namely the company’s convenience stores and bottling operations.

"The Devil has a love affair with his two new babies, Coca-Cola and Oxxo [convenience stores]," said Monterrey corporate lawyer, Ernesto Canales. 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, Fernández said said he planned to focus on expanding his Coca-Cola bottling business. He is optimistic, and prepared to “go hunting” for new business ventures.

However, some new competition for Coca-Cola – and therefore, the Devil Fernández – 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 approximately 60% of the country self-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, candy, shampoo, cookies and liquor are made with coca. The Vice-Minister of Coca and Integrated Development Jerónimo Meneses said "Coca Colla will be part of the industrialization of coca production."

The AFP pointed out that Bolivia’s new constitution, passed in January of last year, officially states that coca is not a drug in its natural form, and recognizes the leaf as a “cultural heritage, a natural and renewable resource of biodiversity in Bolivia and a factor of social cohesion.”

Chicha Resurgence in Colombia

Another development in Latin America also challenges the type of corporate globalization Heineken and the Devil Fernández are pushing. Chicha, a homemade alcoholic drink typically made from corn for centuries throughout the Americas, is enjoying a comeback in major Colombian cities, according to Inter Press Service reporter Helda Martínez. Many people, particularly students, are drawn to chicha as an alternative to beer from massive commercial producers.

In Bogotá, 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, according to Martínez.

Throughout the 20th century, campaigns and bans were initiated against chicha, in part due to pressure from competing beer and soda companies in Colombia. In her IPS article, Martínez cited historians Oscar Iván Calvo and Marta Saade who wrote of the bans on chicha during the 1940s 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. Calvo and Saade’s words underline the urgency for contemporary alternatives to capitalist monopolies which squash local culture and diversity: "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. Abraham Nuncio, in the La Jornada column on the beer merger, 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.”

BENJAMIN DANGL is currently based in Paraguay and is the author of "The Price of Fire: Resource Wars and Social Movements in Bolivia" (AK Press) and the forthcoming books: Dancing with Dynamite: Social Movements and States in Latin America (AK Press) and, with co-author Chris O’Brien, Bottoms Up: A People’s Guide to Beer (PM Press).Email: Bendangl(at)gmail(dot)com.

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