(20 Feb 2025)
RESTRICTIONS:
ASSOCIATED PRESS
Guadalajara, Mexico – 15 February 2025
1. Various of tequila being served
2. Close of tequila bottles
ASSOCIATED PRESS
Arenal, Mexico – 12 February 2025
3. SOUNDBITE (Spanish) Diego Milán, Cocula Tequila brand owner:
"It is really going to have a strong impact, because on the shelf you are competing with other premium drinks such as cognac, whiskey, or some very good vodkas. And if all of these come from a country where there are no tariffs, our product becomes in this case 25% more expensive."
ASSOCIATED PRESS
Jamay, Mexico – 7 February 2025
4. SOUNDBITE (Spanish) Efraín Velázquez, Agave farmer:
++SOUNDBITE PARTIALLY COVERED++
"In order to stay in business, if the tariffs come in place, my plan is to change the market, even look to a different country that gives us a wider work margin."
5. Various of agave farmer Efraín Velázquez on his agave field
ASSOCIATED PRESS
Arenal, Mexico – 12 February 2025
6. Various of women working on the production line at Tres Mujeres Tequila factory
7. SOUNDBITE (Spanish) Diego Milán, Cocula Tequila brand owner:
++SOUNDBITE PARTIALLY COVERED++
"Without any doubt, our biggest client base is the United States, although we are building a global brand. The United States consumes over 85% of the industry’s production of 100% agave tequila, because of origin denomination."
8. Mid of Diego Milán walking among fermentation tanks
ASSOCIATED PRESS
Jamay, Mexico – 7 February 2025
9. SOUNDBITE (Spanish) Efraín Velázquez, Agave farmer:
++SOUNDBITE COVERED++
"I believe that if tariffs come into place the prices will rise, and they will stop a lot of small farmers that are aiming to grow. Those tariffs will stop them."
10. Various of Velázquez in his agave field
ASSOCIATED PRESS
Zacoalco, Mexico – 17 February 2025
11. Harvesting crew working at a agave field
STORYLINE:
In 2023, the U.S. imported $4.6 billion worth of tequila and $108 million worth of mezcal from Mexico.
President Donald Trump’s wider tariff threat looms, something analysts say could trigger a recession in Mexico.
The imposition of broader tariffs would likely start a trade war, with Mexico President Claudia Sheinbaum promising reciprocal tariffs, both of which would result in price increases for consumers.
The Mexican province of Jalisco is the spiritual home of tequila. Many of the biggest tequila brands here are owned by American based companies such Seagrams or Bacardi.
But there are also smaller companies that have placed their investments on both sides of the border, like "Cocula," a premium craft brand.
Owner Diego Milán says tariffs would make their product less competitive.
"It is really going to have a strong impact, because on the shelf you are competing with other premium drinks such as cognac, whiskey, or some very good vodkas. And if all of these come from a country where there are no tariffs, our product becomes in this case 25% more expensive."
The tequila production and supply chain starts with the farmers, although many companies like Milan’s own the whole chain.
Efraín Velázquez is a small farmer who recently decided to grow organic blue agave at his farm near the Chapala lake in Jalisco state.
He says that if tariffs are imposed he will look to partner with a German company to produce agave syrup, rather than selling his product to Tequila companies.
"In order to stay in business, if the tariffs come in place, my plan is to change the market, even look to a different country that gives us a wider work margin," Velázquez says.
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