Last of the tequila giants set for foreign ownership

"Tequila may be Mexico’s national drink, but if the anticipated sale of Jose Cuervo to British multinational Diageo goes through, not one of the country’s major tequila companies will remain in Mexican hands.

Diageo, which owns Smirnoff, Johnnie Walker, Baileys and Guinness, already has an international distribution deal with Cuervo and is now looking to acquire ownership of both the Cuervo and 1800 brands owned by Mexico’s Beckmann family since their foundation over 200 years ago.

Takeover talks are ongoing, but the deal for Cuervo – the world’s largest tequila producer – is reportedly worth up to 3.4 billion dollars. There is an air of inevitability about the sale, with this being the last big tequila producer to fall from family hands into the arms of a foreign corporation.

“All the world’s major brands are controlled by the five biggest multinational consortiums,” says Luis Margain Sainz, a lawyer with 42 years of experience in the tequila industry. “First they associate with a company, then they control it, then they expand it and finally they buy it out.”.........

http://theguadalajarareporter.com/news-mainmenu-82/business-mainmenu-88/31495-last-of-the-tequila-giants-set-for-foreign-ownership.html

While these events seem to be a reality in today's world, we sure hate to see a Mexican treasure controlled in this way! We will continue to support the smaller brands and the fine tequilas many of them produce.

I had been under the impression that 100% foreign ownership in Mexican corporations was somehow restricted but maybe it is just certain industries? While doing some research on this, I ran across an excellent article about the Tequila business:

"So, You Want To Be In The Tequila Business?
Think Twice

by Jose Perez
October 2010

Other than rock stardom, what do: Sammy Hagar, Justin Timberlake and Vince Neal (The Motley Crew), have in common? They have all taken a “shot”, pun intended, at the tequila business. Celebrities have also invaded other liquor markets. Grey Goose Vodka’s “overnight success”, motivated Kevin Spacey to try his hand at upscale branding his own label of vodka. If you are a tequila fancier, the thought may have entered “su cabeza” of branding your own, especially after sipping a couple of your favorite añejos. If that is the case - read on…..

The past 25 years I have assisted foreigners in establishing joint ventures with Mexican partners. Most clients, establish J.V.’s to exploit cheap labor and export advantages provided by NAFTA. Joint venture contracts for products manufactured by Mexican partners were mostly agreements for marketing rights in “the states” or Canada. Separate business entities with mutual interests. Often, mistrust over “real” production costs and market pricing destroyed what should have been successful partnerships. Rarely have these joint ventures resulted in a “one company” philosophy in which the Mexican manufacturer participates in the profitability of the U.S. firm..............

http://www.mexicomatters.net/businessmexico/11_tequilabusinessthinktwice.php

CanuckBob wrote:Strange......yet the Mexican government won't allow foreign interests to invest in their oil exploration.

I heard Brazil offered to drill oil for Mexico because Mexico has no modern drilling rigs for 10% of the profits. Mexico said no.

Ah, yes. Dawg is of neccesssity on the wagon in the pursuit of continued life on the planet for a time to come, hopefully but, no matter the ownership, I swear by Herradura Blanco as the best tequila on the planet. There are some very good boutique tequilas but I wlways return to mama. I could easily drink a liter of Herradura Blanco a day but feel perhaps that that would severely limit the number of days still coming to me.

In accordance with CG´s notion of joint venturing with Mexican liquor distillers, I must find a distiller producing the best blanco as I hate wood in tequila and joint venture a product with that distiller. Unlike Kevin Spacy and other celebrities, however, I have decided to forego my own name, Hound Dog, and name this new joint venture, high octane product under a name beloved of the French for liquor that knocks one on one´s ass; namely Qui M´a Pousse , the equivalent in Spanish of , Que Me Empujó but it´s more poetic sounding in French..

dog - Is the Blanco more pure and better for drinking straight than the others?

John:

While that story has been reported and discussed numerous times in both the regular and business press. However, the Mexican Government and Pemex figure that they can get a comparable deal from the US and International oil companies who posses more advanced equipment and technology. It has been speculated that there is no way that US or International companies would return after the oil supply nationalization that happened in 1938 but profits/money talk. In the 70+ years since the nationalization occurred, you can bet that all of the affected oil companies wrote off the losses on their taxes, probably many times over. With the new "sideways drilling", it should benefit Mexico to work with those who have the adjacent oil leases to minimize the supply losses and maximize Pemex's benefits.

johninajijic wrote:dog - Is the Blanco more pure and better for drinking straight than the others?

I think so, John just based on the fact that whether one is speaking of fine whisky or tequila añejo, the wood is an impure component of the distilled spirit which imparts a unique flavor to the product which, in the case of great single-malt scotches is fine but I simply don´t like to adulterate my tequila with wood. That´s just a personal preference so I can´t speak for anyone else. Many would argue that tequila añejo is superior. To each his/her own.


The finest drink in the world to me is a double shot of Herradura Blanco neat with a Hound Dog´s Special Recipe Super Spicy Garlic Infused Sangrita or lime chaser. Well, maybe some Havana Club Special Reserve Aged Dark Rum. For now, under the circumstances, I´ll have to settle for another glass of limeade with Splenda. Damn!

My PT drinks only "blanco" and I believe it's Herradura.

John:

Just like pizza or most other food entrees, the level of preference of certain Tequilas is a matter of personal taste. Last January when we toured Casa Cofradia, they provided up with a taste of the first distillation and we found it to be very harsh. Our guide suggested that we pour and residue from that tasting on our hands, which resulted in very smooth skin after a couple of minutes. A bit later, we tasted the Blanco, then Reposado, then Anejo and then Extra Anejo. The differences were quite noticeable and to me, the choice of which one is preferable depends on how one plans to drink it.

[i]Our growing collection of fine Tequilas, which now is approaching 40 is comprised exclusively of Reposados, Anejos and Extra Anejos since at this stage, we choose not to open any of the collection.[i]

hound dog wrote:

johninajijic wrote:dog - Is the Blanco more pure and better for drinking straight than the others?

I think so, John just based on the fact that whether one is speaking of fine whisky or tequila añejo, the wood is an impure component of the distilled spirit which imparts a unique flavor to the product which, in the case of great single-malt scotches is fine but I simply don´t like to adulterate my tequila with wood. That´s just a personal preference so I can´t speak for anyone else. Many would argue that tequila añejo is superior. To each his/her own.


The finest drink in the world to me is a double shot of Herradura Blanco neat with a Hound Dog´s Special Recipe Super Spicy Garlic Infused Sangrita or lime chaser. Well, maybe some Havana Club Special Reserve Aged Dark Rum. For now, under the circumstances, I´ll have to settle for another glass of limeade with Splenda. Damn!

It may be late in the game to share this with you Ole Timer... but Limonade with GIN makes a Heavonly summer concoction :)

johninajijic wrote:My PT drinks only "blanco" and I believe it's Herradura.

Herradura is owned by the same company that owns Jack Daniels a one time good
booze. I hope Herradura quality doesn't go down. They are the last volume producer
that uses the bugs in the air to ferment like the old days. They still have the old pits
in the ground. Not a tour to be missed in your mexican adventure. I go there everytime
I can.

Z

El Tesoro de mi Tierra is 100% Mexican owned.

Also manufacturers of the very popular Alien tequila.

Zedinmexico wrote:

johninajijic wrote:My PT drinks only "blanco" and I believe it's Herradura.

Herradura is owned by the same company that owns Jack Daniels a one time good
booze. I hope Herradura quality doesn't go down. They are the last volume producer
that uses the bugs in the air to ferment like the old days. They still have the old pits
in the ground. Not a tour to be missed in your mexican adventure. I go there everytime
I can.

Z

Sorry to tell your this Zed, but the natural yeast and the pits are only for the tour. Herradura uses all the latest mass-production techniques, same as all the other big industrial producers.

Have to agree with you Hound Dog the Herradura (92 proof Mexican version, not the so-called suave they deem fit for export) is one of the truly great blanco Tequilas, and for Tequila more than any other spirit wood just gets in the way.

El Tesoro and the almost impossible-to-find Los Abuelos are the only two Tequilas that are truly handmade, but there are a lot of great ones out there. Check out Siete Leguas, Chamucos blanco especial (at La Playa), etc. More info can be found on this recently updated post:

http://eatinglocalatlakeside.blogspot.mx/2012/06/tequila-beyond-frozen-margaritas-shots.html