Constellation Brands

Water rights, a $1.4B brewery, and the social license to operate

March 27, 2020

Constellation Brands (STZ) may see long-term supply constraints due to water issues. This week, investors have had to grapple with the implications of results from a local referendum that took place during World Water Day that rejected the completion of Constellation Brands’ $1.4B Mexicali Brewery in Baja California, Mexico. In this Brief, we discuss the following:

  • The concept of the ‘social license to operate’
  • Tracking ‘pathways to materiality’ and the notion that stakeholders can elevate issues such that they become financially material
  • Underlying groundwater issues and the implications for STZ the beverage industry
Industry
Alcoholic Beverages

Material Categories
Water & Wastewater Management