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Therearecertaincommoditiesinthemarketthatareidentifiablebythecountryorregionthey
originatefrom.Eveniftheproductionprocessisexported,theoriginalsourceisalways
favoredbyglobalconsumers.Tequilaisonesuchproductthatisconsideredmostlegitimate
whensourcedfromMexico.BradyBunterecognizesithasbeenamajorrevenueearnerfor
thecountry,withmajorityofexportsgoingtotheU.S.Tequilahowevernotalwaysbeena
blessingtothenationaswasevidencedbythe1994Mexicaneconomicrecessiondubbedthe
TequilaCrisis.
BradyBunte,whohasworkedinthetequilaindustryformanyyears,acknowledgesthatthis
wasaparticularlyturbulentperiodforthecountry.AccordingtoBradyBunte,theMexican
governmentatthetimesoughttomaintainthepesovalueusingafixedexchangerateregime.
Topreventthedeclineofthecurrency,thegovernmentundertooklargeamountsofshortterm
debttofinancebuyingofpesos.Thisartificialdemandwasintendedtohelpappreciatethe
valueofthepeso.
Asinvestorsrealizedthecurrencywasovervalued,theybeganpullingouttheircapital,
resultinginmultiplefinancialdifficultiesforthecountry,includingrisinghyperinflation,erosion
ofstockmarketvalueandadifficultyinsettlingshorttermdebtbythegovernment.The
problemwaseventuallydealtwiththrougharescuepackageextendedbytheU.S.,floating
thecurrencyandothereconomicreforms.
Therepercussionsofthiscrisiscontinuetobefeltinthepresentdayasthevalueofthepeso
isnowdeterminedbythemarket,ratherthanthegovernmentanditsinterventions.Itisalso
interestingtonotehoweconomicreformsthatstemmedfromthetequilacrisishaveactually
affectedthecommodity.
AccordingtoBradyBunte,thelast20yearshasseenasteadygrowthindemandfortequila.
Muchofthisdemandcanbeattributedtothedevaluationofthepesowhichmeantthatforeign
buyerscouldgetmorevaluefortheirmoney.BradyBuntedescribesitasasaleperiodwhere
youcanget2for1.Atthebeginningofthecrisis,yougotjustunder4pesosforeachUSD.
Overtheyears,andthankstocorrectingofthemarketposition,youcannowgetabout15
pesosforeachdollar.
Althougheconomicreformshashelpedstabilizetheeconomy,investorconfidencehasbeen
somewhatshakeninrecenttimesbythepoliticalturmoilandcrimesengulfingthenation.
AccordingtoBradyBunte,therecentkillingof43studentsinIguala,andmoreviolentcrime
reportsdrivenbygangsworkingincollusionwithpublicofficialshasprovenagraveconcern
forinvestors.
EvenasdemandfortequilagrowswithnewmarketsopeningupinAsia,thereisalsothe
problemofloweragaveharvestprojections.Thedevaluingofthecurrencyandrisinginflation
meantthatagavegrowershaveoverrecentyearssufferedlowerprofitsontheircrops.Brady
Bunteconfirmsthatthepricingontheseharvestsisusuallylockedinyearsinadvancebythe
distillers.Withlowreturnsontheirinvestmentandinflatedprojectionsforthedemandof
agave,manyhaveoverthelastdecadeoptedtocutbackontheircrop.
Recentreportsalreadyindicatethattherewillbeashortageofagavecropsoverthecoming5
years.AnotherchallengenotedbyBradyBunteisthefaketequilaproductsoriginatingfrom
otherpartsoftheworldthatareseepingintotheinternationalmarket.Allthisistoughnews
forthetequilaindustry,asthedevaluedcurrencyhasalsomeantlowerreturnsforexporters.
Economicrecessionstendtohavealingeringeffectanditisclearthatdespitethe
stabilizationoftheMexicaneconomynow,thetequilacrisisisstillaffectingindustries,none
moresothanthatwhichitisnamedafter.BradyBuntebelievesitwilltakecontinued
economicstabilityandaninspiredleadershiptohelpensurethattheidentityofMexican
producedtequilacontinuestoprevailanddominatethemarket.