By Savyata Mishra

April 10 (Reuters) - Modelo Especial owner Constellation

Brands' ( STZ ) beer sales are taking a hit as demand from

Hispanic populations in Mexico and other key markets slows down

amid Trump's crackdown on immigration, company executives said

on Thursday.

President Trump has kicked off a sweeping immigration

crackdown after taking office in January, ratcheting up

pressures on the Hispanic consumers burdened by higher prices of

food and other essentials as well as elevated unemployment

rates.

Modelo Especial is made exclusively in Mexico, and is

imported and marketed in the United States by Constellation

Brands ( STZ ). The brand has enjoyed huge popularity in the past couple

of years, overtaking Bud Light as the top-selling beer brand in

the U.S. in 2023.

However, the momentum is now waning, with Constellation

noting a sizable demand slump in its top sales states and zip

codes with larger Hispanic populations.

After markets close on Wednesday, the brewer projected a

smaller-than-expected annual adjusted profit, expecting steep

tariffs to weigh on its business.

Latino customers, who represent roughly half of Modelo's

customer base, have pulled back on social gatherings - a key

occasion for beer consumption, according to Constellation

Brands' ( STZ ) CEO Bill Newlands.

"Efforts to go to restaurants, to have social gatherings,

things that are very much beer occasions, have softened in the

more recent term," he said during its fourth-quarter earnings

call.

Constellation Brands' ( STZ ) beers enjoy the highest level of

loyalty among Hispanic consumers relative to any other major

beer supplier in the U.S., the company said in its prepared

remarks.

Newlands said the company's research also found that

Hispanic consumers were under pressure from job losses in

industries with a high Latino employment base.

"We think the quick change in tone/outlook at least

partially reflects the likely reality that the company was

benefiting over the past number of years from loose immigration

policy," J.P. Morgan analyst Andrea Teixeira said in a note.

Meanwhile, a 25% levy on aluminum and other broader tariffs

under the Trump administration also threaten to lead to price

hikes for these beers.