MEXICO CITY — The company that brews Corona beer took another blow on Monday when the federal government said it would not allow a massive, partly-built $1.5 billion brewery on the border after residents rejected it in a referendum.
The Victor N.Y.-based Constellation Brands had already suffered a wave of what it called unfounded rumors that sales of Corona beer had fallen due to confusion with the name widely used for the current pandemic.
Diana Alvarez, the assistant interior secretary, said the government won't grant operating permits for the plant, which is about two-thirds built.
"The federal government is going to get in touch with the company to seek out options for making up the damages," Alvarez said.
The government said 76% voted against the plant in a weekend referendum in the Mexicali area, with 23% in favor, with about 36,781 votes cast.
A coalition of groups that oppose the plant cheered the result, calling it "a historic precedent in the defense of the right to water." They claimed the plant would have taken 20 billion liters of water out of an already over-exploited aquifer.
The company had said the plant would be very water-efficient and would use only a tiny fraction of the water that is used every year in the area for agriculture.
But business groups slammed the referendum, saying very few people voted: less than 5% of eligible voters in the Mexicali area turned out, possibly because of concerns over coronavirus.
Business chambers said the decision will hurt investor confidence in Mexico.
"A handful of people can't decide investments of billions of dollars," the Mexican Employers Federation said in a statement. "The results of the referendum are bad for the beer company and damaging to the country's economy, but they will be even worse for the residents of Mexicali, who will see the jobs and development they had evaporate."
Alvarez said "of course we care a lot about investment, we are not against foreign investment, and we certainly not are going to oppose job creation, but we have to take people's opinion into account and take care of our natural resources."
"We are going to seek out ways to make it easier for them (Constellation), if they want to, to put the plant somewhere else, in regions where there is water, " Alvarez said.
President Andrés Manuel López Obrador has made a point of trying to promote development in Mexico's impoverished but water-abundant south, but that is far from the United States, Corona's biggest export market.
Constellation owns Corona, Negra Modelo and Pacifico beers.