The world's largest tequila maker is blaming President Donald Trump's heavy-handed immigration crackdowns on its slumping sales.
Proximo Spirits — the U.S. distribution arm for Becle, which owns Jose Cuervo tequila — said that fear in the Hispanic community has kept some at home rather than going out and having drinks.
“The tension of the immigration policies has created a very difficult atmosphere with consumers, especially with immigrants, with Hispanics, [who] obviously make up a big portion of our particular business,” Lander Otegui, Proximo Spirits' head of marketing, told The Financial Times.
The Trump administration's immigration raids have been a key focus of his first year back in the White House. Masked federal agents have been accused of waiting at courthouses and even waiting outside of schools to make arrests. And federal officers have made several mistaken arrests of U.S. citizens.
“Consumers are afraid, even [if they] are legal,” Otegui said. “You’re just afraid because you don’t want to get in trouble... So they don’t want to go out to restaurants. They don’t want to go out to bars.”
The sales hit comes at a time when liquor producers are already struggling with declining numbers, in part due to inflation and the ongoing affordability crisis forcing some Americans to decide between a night out and groceries or rent.
According to Becle's data, its three month sales — ending in December — in the U.S. and Canada dropped 6.4 percent from the year prior. Its revenue dropped 12.2 percent.
Otegui noted that Hispanic consumers weren't just avoiding bars. He said that recent reports of federal agents at grocery stores and outside of retailers like Home Depot have contributed to the fear of going out.
According to NielsenIQ's data, tequila sales in the U.S. fell 6.5 percent year over year in December.
“The general atmosphere is very, very delicate right now,” Otegui said. “And when people stay home they tend to consume less.”
Constellation Brands, the seller of the popular Mexican beer Modelo Especial, reported a 3 percent dip in its distributor's beer sales in the three months ending on November 30.
“Seventy five per cent of the Hispanic consumers are very concerned about the socio-economic environment and they’re being much more careful about their spending patterns, spending much more on what you would call consumer essentials versus other categories,” Bill Newlands, Constellation's chief executive, told The Financial Times.
He noted that beer sales were the weakest in communities where more than a fifth of the residents are Hispanic.
“You see a lot of volatility state by state depending on what is going on with immigration policy in particular markets,” he said.
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