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Why Corona is Big Here, and Miller is So Scarce in Mexico
Topic Global Management
Key Words NAFTA, global, international, trade
News Story

Since NAFTA, Mexican beer imports to the U.S. have grown nearly fivefold. Sales of American beer to Mexico have grown at a fifth of the pace and are only 1/20th the amount of Mexican beer sold in the U.S. Two Mexican beer companies, Modelo and Femsa, together have a 99% market share of the market in Mexico. They have accomplished this partly by securing deals with restaurant chains to sell only their beer, but there are other factors that have shut out American companies. Anheiser-Busch owns a 50% stake in Modelo, ironically secured before NAFTA took effect because Modelo feared its U.S. rivals. Other U.S. companies are suffering, however.

Miller, for instance, has been audited virtually nonstop by tax authorities and raided by customs. Their import license has been yanked and trucks held up at the border. Complaints to the U.S. Commerce Department have not helped. Pabst also routinely has its trucks held up at the border.

Mexican consumers are paying the price, though. As a result of this near-monopoly, they pay much more for premium beer in Mexico than countries like Brazil and Chile.

Questions
1.

Describe the basic principles behind NAFTA. How does it benefit U.S. companies?

2. Many U.S. legislators are opposed to NAFTA. This article demonstrates some of the reasons. Research this topic on the Internet and write a brief paper detailing some of the arguments against NAFTA?
Source David Luhnow, "Why Corona is Big Here, and Miller is So Scarce in Mexico," Wall Street Journal, January 17, 2003, p. B4.
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