MODELO

Trying to drink a beer while riding on the ship of fools.

Modelo. It's a good beer, very popular in the USA.

“The Mark of a Fighter.” Now that’s a brand that appeals to me.

Nothing is nicer than stopping into a bodega in Brooklyn and getting myself a nice 24 ounce can of Modelo for $5. Easy peasy. (It’s only $3 in some big chain stores like Target but I need to rent an e-bike for that.)

An industry insider tells me that aluminum will cross Canadian, USA, and Mexican borders as much as 8 times before it ends up as a can containing Modelo beer.

(I’m also informed that glass is treated altogether differently than aluminum when it comes to the Liberation Day tariffs.)

Grupo Modelo is a massive brewing company in Mexico. They make the beer.

In 2012, Anheuser-Busch InBev SA/NV completed the purchase of Grupo Modelo so Modelo beer is made in Mexico by a company headquartered in Belgium.

(It's a publicly traded European beer company. Well, its primary listing is on the Euronext out of Brussels. However, their stock can also be traded through secondary listings on Mexic and Johannesburg exchanges as well as the NYSE.)

But wait, the USA blocked the AB InBev’s acquisition of Grupo Modelo for anti-trust reasons, so AB InBev licensed the rights to sell Modelo in the United States to Constellation Brands. Constellation is an all-American company out of Rochester, NY.

If your following me, the money I pay for the can of Modelo that I buy at a bodega in Brooklyn benefits the stock holders of an American company that pays a European company a licensing fee to sell their beer.

In the USA, the beer manufacturer or importer cannot sell to retailers. Constellation cannot sell beer to Walmart. A Walmart in Texas cannot buy Modelo from the same distributor as the Walmart in California. In every state, there are specific state approved distributors who have local monopolies as the middle man in between the beer creator and the beer retailer.

Grupo Modelo in Mexico City is about 20 degrees of separation from my bodega in Brooklyn. The aluminum smelted in Canada that contains my can of beer is about 100 degrees of separation from the smelter and my hand holding that nice cold beer.

The distributors mark-up the price of the beer and then the retailer marks-up the price again before the customer actually buys their can of Modelo.

If the tariff is calculated based on the cost of the can of Modelo as it leaves the brewery in Mexico City, maybe that won’t effect me too much. If the tariffs are calculated based on what I am paying for my beer, well shit, I might switch to city water and start eating gummies.

So, I have a simple question for the economic advisor to the President, Peter Navarro, and to the Treasury Secretary, Scott Bessent…

How much do I pay for my god forsaken can of Modelo in my favorite local bodega in Brooklyn?