“Under USMCA, Alcohol Industry Asks Mexico to Equalise Taxes With US and Canada”
Proceso reports:
“The Alcohol Commission (CIVyL) seeks a unified fiscal scheme matching USMCA partners. Mexico currently uses an ad valorem system; industry proposes ad quantum. The sector claims to generate 25 billion pesos in taxes annually and 155,000+ jobs.
“An estimated 42% of alcohol sold may come from the illicit market. Over 9 billion litres of beer are sold annually, representing 93.9% of alcohol consumed in Mexico.”
Other Articles on Same Topic
- A Chamber of Deputies forum (March 25) revealed competing industry proposals: the tequila chamber proposed ad quantum at $1.37 per degree of alcohol; Moderniza IEPS countered with $1.68 per degree. Small producers expressed concern about competition with larger distilleries. Beer is exempt from some state taxes. The working group timeline: quota review by June 30, Commission review in August, proposals to Treasury for the next fiscal package (Moderniza IEPS)
Assessment
This is not a new campaign. Previous Movendi coverage has documented the same IEPS lobby effort and exposed the proposal as designed to make alcohol cheaper. The push is led by CIVyL, a front group representing transnational spirits giants including Diageo, Pernod Ricard, Bacardi, Brown-Forman, and Campari Group. The new element is the USMCA framing, which repackages the same proposal as trade harmonisation with North American partners.
Mexico currently taxes alcohol ad valorem – as a percentage of retail price: 26.5% for beverages up to 14% ABV (beer, wine), 30% for 14–20% ABV, and 53% for spirits above 20% ABV. The alcohol industry wants to replace this with an ad quantum system taxing by alcohol content. The rates proposed at the Chamber of Deputies forum – $1.37 per degree per litre (tequila chamber) and $1.68 (Moderniza IEPS) – are low enough that they would reduce the effective tax burden on beer and most spirits. For premium tequila, the reduction would be even more significant. Only cheap spirits like aguardiente de caña, which currently pay very little IEPS, would see increases.
An ad quantum system based on alcohol content is in principle what WHO recommends – but only if rates are set high enough to reduce affordability and prevent alcohol harm. The rates the alcohol industry is proposing in Mexico would do the opposite for the products that dominate the market.