Constellation Brands, global parent company of beer, wine, and spirits brands including Mexican lagers Corona, Modelo, and Pacifico, is predicting price increases of its beer brands due to a glass shortage, along with an overall rise in commodity costs that may pressure beer margins, Bloomberg reported on Thursday.
Specifically, a dearth of brown glass is predicted to affect prices of Modelo Negra and Pacifico, and others known for their signature brown glass bottles. This could trickle down to affect the sales and prices of flagship brands such as Corona and Modelo Especial. The price increase will be more than the annual 1- to 2-percent increase caused by inflation, according to reports.
Constellation CEO Bill Newlands said in the company’s third-quarter earnings call on Jan. 6, “We are diligently working to address the brown glass shortage that is acting as a headwind.”
Constellation CFO Garth Hankinson stated in the same call that margins in the beer industry may suffer in the 2022 fiscal year because of successive shortages and inflating commodity prices. Overall, Hankinson predicts the operating margins for the beer industry will continue to underperform by 39 to 40 percent.