By Bimal Rajkomar
Daily Bruin Contributor
Drinkers looking for something south of the border may be
reaching for a cold Corona instead of a shot of José Cuervo
since tequila prices are on the rise.
“Prices are already on the rise, up 10 to 15 percent, and
will continue to do so as the shortage becomes even more critical
over the next one to seven years,” said F. Paul Pacult,
editor of the Spirit Journal, a newsletter on liquor.
The agave shortage and consequent price increase will hit
businesses that rely on the drinks at the worst time ““ summer
““ when demand for tequila and margaritas rises.
“A combination of poor planning by government and tequila
industry, and frosts which affected up to 10 to 15 percent of
mature agaves and pests,” have contributed to the shortage of
agave, Pacult said.
Tequila is made from distilled sap from hearts of the agave
plant. Commonly thought to be a cactus, the agave plant is actually
a succulent, related to the lily and amaryllis.
This shortage is likely to have long-term consequences because
agave plants take 8 to 12 years to mature and yield fruit only once
a season.
Like cognac and champagne, tequila is produced exclusively from
one region of the world, the arid highlands of central Mexico, so
tequila companies cannot simply buy from growers in other areas. In
addition, two recent diseases have taken their toll on mature
plants.
But, the real culprit of the shortage may be rapidly growing
demand, industry analysts said.
According to industry numbers, tequila consumption has doubled
in the last five years making it the world’s fastest growing
liquor.
Known for its popular Margarita Monday’s, Acapulco in
Westwood hasn’t yet raised prices, but it has been affected
and is concerned with what it has been hearing in the media.
“Yes, we’ve felt it,” said Ricardo Estrada,
floor manager at Acapulco. “We haven’t had to increase
prices yet, but we are looking into it.”
Because businesses like Acapulco buy tequila in bulk, the price
increase in tequila is readily apparent. Agave prices increased
tenfold last year.
With the price hike, the question is whether tequila will
continue to rise in popularity or if will drinkers balk at the
price increase.
“I doubt it will be too severe,” said Jose de la
Torre, professor and director of the Center for International
Business Education and Research.
“If you consider that the cost of the tequila in your
average margarita is less than 10 percent, you can double the price
of the ingredient and still have a small impact on the
consumer’s cost in your local bar,” he said.
Though he believes that the shortage may not greatly affect
prices at bars, he says that the price of tequilas in supermarkets
may be a different situation.
With more than 500 brands of tequila available, the impact could
be significant.
The brands that may be hit hardest are the high-end tequilas
made of 100 percent agave, which have become more popular. An
increase in the number of tequilas made of 100 percent agave
doubled from1995 to 1998.
Larger brands may not be as affected as much because it owns
many of its own agave fields.
Some students believe that a price increase will simply lead
drinkers to seek another drink rather than put up with high
prices.
“The shortage of agave plants probably hurts those who
have a taste for tequila,” said Billy Lyle, a first-year
electrical engineering student. “But I think that most
drinkers will just turn to other liquors such vodka, rum, gin
““ something that won’t cause them to go
broke.”
The effects of the tequila shortage are still uncertain, but
according to de la Torre it should not be a big deal.
“In sum, enjoy your next tequila and don’t worry too
much about it,” de la Torre said.
Perhaps the only thing tequila drinkers may have to worry about
will be getting the worm.