The tequila oversupply in Mexico is brutal

Mexico currently stores more than 500 million liters, or 714 million 0.7-liter bottles of tequila, almost the same amount as its annual production. After years of growth, the sector is now facing new challenges: a significant build-up of stocks due to falling demand and the threat of US export tariffs. Demand for tequila has grown rapidly over the past decade, especially in the US, where celebrity-endorsed brands such as George Clooney’s Casamigosa have helped the drink’s popularity explode. However, the trend has stalled in the past 18 months, as the Covid-19 pandemic’s boom in alcohol consumption has waned, while rising prices have made consumers more cautious. According to IWSR data cited by the Financial Times, US spirits sales fell 3% in the first seven months of the year compared to the same period last year, while tequila consumption fell 1.1%. This is a significant change from 4% growth in 2023 and a 17% jump in 2021, which marked the peak of tequila consumption. According ...