Good Beer Hunting

More Beer, More Problems — Global Brewers Face Resistance, Shifting Expectations


American beer enthusiasts have long shared ire toward “Big Beer” for its perceived encroachment on small and independent brewers. But the U.S. and its particular politics act as only one part of these conglomerates’ worldwide footprint. Companies like Constellation Brands, Heineken, and Anheuser-Busch InBev don’t solely exist to conquer the American beer market. Rather, the U.S. is one important part of a giant, global system where many business opportunities crisscross the world. No matter how exceptional America might be, it’s not only about what’s going on Stateside.

In the larger world, the impact and challenges of these companies are far different as their growth targets take them into economies with more fundamental needs. In recent weeks, these companies have been embroiled in various controversies on a range of serious issues from water rights to human safety concerns of sexual harassment and prostitution to labor relations—not unlike the kind which apparel and tech manufacturing are often associated. And as each of these examples show, vulnerabilities exposed by social and political stances, both similar and different from U.S. standards, are just as important—and sometimes directly tied—to commercial success.

South of the border, Constellation Brands is under attack from locals who oppose the construction of a new $1.5 billion production facility. Opponents say that the plant would siphon off already-scarce water supplies for those who live in Mexicali, a city about 120 miles east of San Diego and home to about one million people in its entire metro area.

Just more than a third of Mexico’s aquifers are overexploited, according to the country’s National Water Commission, with the situation so bad in Mexicali that there can be no more drilling of new wells. According to its website, Constellation uses 3.19 liters of water to produce one liter of beer, which it notes is under an industry average of 3.53. At its Nava, Mexico plant, Constellation says it reuses about 35% of incoming water and has a water intensity rate of 3.15 liters of water per liter of beer. Still, the Mexicali brewery is projected to use 6.8 billion liters, equivalent to roughly 1.8 billion gallons.

“If this brewery was such a good deal wouldn’t it be [across the border] in Calexico or Las Vegas?” local farmer Eduardo Cisneros asked The Guardian. “They just want cheap water and cheap labor.”

Constellation says it’ll eventually create 750 jobs by bringing the plant online some time next year, but its success would simply highlight the animosity that already exists. Mexicali may get jobs, but lose water in the process. Meanwhile, Constellation would be sending beer produced at the facility elsewhere, most notably in the U.S. where its Mexican-beer-led import business accrued nearly $4 billion in IRI-tracked stores that include grocery, convenience, Walmart, and more.

Constellation issued a statement to NPR to emphasize that they “continue to work with local authorities to ensure all aspects of our brewery construction project are in full compliance with all applicable rules, regulations, and laws.” But that’s not enough for local activists, led by the group Mexicali Resiste.

"It's a model of exploitation and capitalism where they basically come for the natural resources to exploit them and take them away to wherever the market is," Mexicali Resiste co-leader Jesus Galaz Duarte told NPR.

Water rights are similarly under debate in the U.S. as it was recently reported that Nestlé cut a new deal for public water rights nearby Flint, MI. For Nestlé, it meant winning the ability to pump 576,000 gallons a day from the public water supply despite 80,000 comments against the agreement. It also meant that free bottled water was cut back to Flint residents whose water quality reached poisonous levels.

In both these examples, the rising competition between public and commercial rights to resources is creating a flashpoint whereby priorities of citizens and commercial entities are at odds.

What started out as an attempt by Heineken to “fight infectious diseases in Africa” quickly turned into something of an international scandal. At the end of March, the Global Fund to Fight AIDS, TB, and Malaria pulled out of a partnership with the brewing company after voicing concerns related to treatment of women who promote the beer across Africa.

When the effort was initially launched, activists initially pointed to an awkward connection of a global health agency connecting with a beer maker. However, Global Fund leadership instead became worried by reports of sexual exploitation by female beer promoters.

“We take these allegations very seriously and have challenged Heineken to examine their operations and make changes to protect women from sexual exploitation and health risks,” Peter Sands, executive director of the Global Fund said in a statement. “We are suspending the partnership until such time as Heineken can take appropriate action to address these issues.”

The issue came to a head after a story ran in the Dutch newspaper NRC Handelsblad, documenting first-hand accounts of women who shared stories of sexual harassment and borderline prostitution.

One woman, who identified herself by the first name “Peace,” said she is touched inappropriately during every promotional stint at bars, but she doesn’t notice it anymore because the action has become so pervasive. She also noted that providing sex is common and said that some sex workers take on promotional positions to meet potential customers.

According to the NRC report, Peace and others aren’t employed by Nigerian Breweries, the local subsidiary of Heineken, and instead are hired through third-party agencies. They’re suspected to be paid an equivalent of about $9 U.S. per night, which is a “common fee for unskilled work” in Lagos.

Heineken said the allegations “completely contradict what we stand for as a company and we strongly condemn these abuses.” Last year, Heineken actually became a partner of Vital Voices and their Global Freedom Exchange program, whose goal is to support women leaders working to prevent and respond to human trafficking. While Heineken obviously doesn’t condone the actions, it does recognize the use of promotional workers in 10 countries, including its Africa markets, according to the NRC report.

One woman who identified herself as “Mary” told NRC that sex is regarded as a common transaction in Nigeria, intimating the same took place during Heineken promotional events as well.

The brewer’s partnership with the Global Fund is still to be resolved.

Videos of worker strikes in India have been appearing online, and while they haven’t been verified by local media, some are suggesting the workers are protesting at an Anheuser-Busch InBev factory in the village of Sonipat, about 30 miles north of New Delhi. Since March, YouTube user "sonipat india" has been posting videos with various headlines saying the people seen in the clips are rallying against the multinational company.

Reasons behind the protests aren’t entirely clear. The website, “the site for organized workers in 'big beer,’” says that local union members are striking after union president Anil Kumar Saini was fired from the factory after he took earned time off after working for 16 hours on a public holiday. It’s not mentioned when the dismissal took place or which holiday is being referenced, and it appears local media have not covered this accusation.

Ingvild van Lysebetten, global external communication director for AB InBev, tells GBH that a "couple" people have been protesting as they await legal proceedings in a labor court. Each video shows about 10 to 20 people holding signs and chanting slogans. Van Lysebetten said that the root of the issue comes from three employees whose jobs were terminated, but couldn't provide details on why they lost their jobs.

She says that operations at the factory haven't been impacted and that "the welfare of our people is our top priority." Van Lysebetten adds that there are no plans for restructuring at the plant or for mass layoffs.

According to a site listed as run by the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations, the strike stems from "a concerted effort to impede workers access to freedom of association and collective bargaining rights." Saini's name was previously brought up nearly two years ago after the IUF claimed a hunger strike took place to protest his suspension.

The protests have been taking place for about 50 days, according to a Twitter account claiming to be covering the event.

Looking abroad highlights the immense structure of all these businesses and the distance of their impacts. While many U.S. drinkers focus on craft brewery acquisitions and marketing tactics as the focus of their concern, it’s rare these companies are discussed in the larger context of global manufacturing. These are the kind of issues that bring these brewers into the ranks of Apple, Samsung, Nike, and others that have faced difficulty in developing markets.

Market share, profit growth, and structural impacts go well beyond the United States, sometimes to the detriment of rights or experiences many Americans may take for granted. Which begs the question: when these companies operate according to the values of the U.S. and Europe in one context, but those values are seemingly abandoned in other far-away contexts, how, then, should we assume the values of the parent company are truly expressed? Are local laws the only meaningful constraint? Is a lack of legal constraint a too-easy invitation to exploitation? Even though the U.S. can seem like the center of the beer world, it’s a reminder of just how big this industry is, and issues that go far, far beyond “small and independent.”