Mexico City, Jun. 6 - Mexican brewer Modelo, the maker of Corona beer, expects to raise domestic prices in the coming weeks to counter rising raw material costs, its chairman and chief executive said Friday.
Carlos Fernandez told Reuters he expects growth in volumes to Modelo's key U.S. market to increase by mid-single digits this year and said sales in the United States have already recovered after a decline in the first three months of 2008.
But Fernandez said that Modelo, which is half owned by U.S. beer giant Anheuser-Busch Cos Inc, was not planning an increase in U.S. export prices this year after its hike in 2007.
Modelo is seeing its margins squeezed because of higher-trending costs for commodities like barley, rice and corn as well as increased power costs.
Asked if Modelo was looking at raising domestic beer prices, Fernandez said: "Yes....Probably we will do something during the summer. I don't have the number, it is something that we should look at based on costs."
But for exports to the United States, Fernandez said no change in prices was in the works. "We believe that the price increase we had last year is enough and for this year we are not foreseeing any price increase."
Modelo's top export market, the United States, was now seeing growth after a 7.7 percent decline in total exports for the first quarter of 2008, he said.
Asked if there was year-on-year growth in the second quarter, Fernandez said: "Yes, we are experiencing different numbers and the trend is very good." He said he did not yet have a number for second quarter volume growth.