Mexican Beer Market! Source: PROFECO y CCM

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2 Mexican Beer Market! Source: PROFECO y CCM

3 Mexican Beer Market! Market Size 2013: 61.5 million bbl 4% Others ( Imports & Craft ) 42% Cuauhtemoc Moctezuma Heineken México 0.16% Local and Import Craft 3.84% Imports (US, Germany, Canada, UK, Belgium) 54% Grupo Modelo (AB- Inbev)

4 Market Trends! Big groups starting to import thier own foregin brands: Stella Artois, Affligem and brewing international brands locally: Heineken, Coors and soon Stella. Its been said that Mexican market will change composition towards Premium Brands. Emerging interest in craft beer and imports.

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8 Craft Market: Local & Imports! Market Share: In Volume 0.16% In Value 0.28%! Market Value: $19 Million USD!! Year # Craft Brewers

9 Craft Market: Local & Imports! ACERMEX Aim: (Mexican Brewers AssociaGon) To get 1% market share at the end of By then, market value may be close to $120 M USD Strategy:! Festivals, Competitions, Workshops, Tastings, Antitrust

10 Craft Market: Local & Imports! Bars and restaurant would expect importer to pay, install and maintain the draft system.

11 Antitrust Lawsuit! August 2010: SAB-Miller filed a lawsuit against Grupo Modelo and Cuauhtémoc Moctezuma for duopoly behaviors. September 2011: Cervecería Primus joined the lawsuit and together with Cervecería Minerva represented the interest of the Craft Beer Industry. August 2013: The Mexican Federal Competition Commission published a resolution that determined that: the use of exclusivity contracts with beer suppliers must be limited Craft Brewers should have unrestricted access to any on-premise venues nationwide. Craft Brewers were defined as those breweries that manufacture beer in Mexico and produce up to 100,000 HL per year. ( < 85,000 bbl )

12 Antitrust Agreement! It does not helped import craft beers, but market is opening fast and sometimes they let restaurants and bars to have Imported Craft Beers. A lot of big chain restaurants which used to be closed to new brands are starting to diversify, most of them American ones: Hooters, Fridays, Capital Grille, etc

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14 Importing Beers to Mexico! There is no 3-tier system or similar. Any Mexican, Mexican established company or foreign company legally established or represented in Mexico can import, distribute and retail. You can be your own importer, but is highly recommended you have a local importer, agent, distributor, or sell direct to the retailer.

15 How Will You Deliver?! 3 apply for ground transactions between Mexico- U.S. CONVENIENT! COMMON / BEST! COMPLEX!

16 Where Will You Deliver?!

17 Main Hurdles when accessing to Mexican Market! Lack of credit references. New Companies Non refrigerated distribution or cold storage. Gray Market Ex. Stone, Ballast Point, Samuel Adams, Eel River, Sierra Nevada, Karl Strauss, New Belgium.

18 Price Structure Off-Premise & Retail! The tax to alcoholic beverages is called IEPS and adds 26.5% for beer and others below 14% Alc. By Vol. There is only one VAT in the country. 16%

19 Imports Cost Structure! Retail Cost Off- Premise (Retail) Retail Markup VAT 16% On- Premise $ % 16% Price to Consumer in Retail $4.34 Bar and Restaurant Cost $2.99 Average Retaurant Markup 150% VAT 16% Price to Consumer in Bar 16% $8.67

20 Regulatory Aspects - Labeling! -All imported products destined for retail sale must be labeled according to the Mexican law. -U.S. suppliers and/or breweries are encouraged to provide a label before the product crosses the border. Can be labeled at border by importer but cost is too high. -Cans can not be labeled must be printed on.

21 Regulatory Aspects - Labeling!

22 Regulatory Aspects - Labeling!

23 Regulatory Aspects Import Requirements! Product has to come with a Commercial Invoice (In Spanish. Can be translated by importer) NAFTA Certificate of Origin may be required. Any company can import but is highly recommended to have a customs agent.

24 Distribution! 65% On- Premise 35% Off- Premise Mexico City Guadalajara Querétaro Baja California (Tijuana, Mexicali, Ensenada) 5. Monterrey 6. Oaxaca

25 Obstacles! Distributors not able to store or deliver refrigerated. Threats! Grupo Modelo (Ab-InBev) expected to acquire Mexican Craft Beer Brands. Both Grupo Modelo and CCM Heineken to bring Crafty imports un the next years. Gray Market

26 Oportunities! Craft Market Value to grow from 19 to 120 Million USD American Craft Beers: Quality and Brand Awareness Importers looking for products. Brewpubs Non alcoholic beer. ( Tax exception possible)

27 Jaime Andreu This document to be available at: hbp://