Brewing Development? Analyzing Legislative Impacts on the Craft Beer Industry in Sonora, Mexico

This thesis examines the impact of legislation on the craft beer industry in Sonora, Mexico. With its unique geographical and cultural landscape, Sonora offers a compelling case for understanding the interplay between local industry and regulatory frameworks. The primary objective is to analyze how taxation and trade regulations affect the development and competitive dynamics of craft breweries in the region. To achieve this, a qualitative approach was employed, utilizing a mix of primary sources such as federal and state legislation, official publications, interviews, and social media content, along with secondary sources including academic publications and media reports. The research highlights the historical context of beer production in Sonora, explores the motivations and challenges faced by local brewers, and critically evaluates the regulatory environment.Through this in-depth analysis, the thesis illuminates the multifaceted landscape of Sonora’s craft beer industry. Central to the thesis is the examination of key legislative milestones. The state-level definition of craft beer serves as a landmark for Sonora’s craft beer industry, distinguishing craft beer from mass-produced varieties by emphasizing traditional brewing methods, quality ingredients, and small-scale production. This legal definition enabled producers to formally establish their enterprises with appropriate permits, contributing to the industry’s growth. At the national level, the research addresses two significant legislative hurdles: the Special Tax on Production and Services (IEPS) and the 2013 COFECE ruling against monopolistic practices by major beer companies. The IEPS, aims at regulating harmful substances, however it imposes substantial financial burdens on small-scale producers as it has no differentiation between craft and commercial brewers , this impacts the competitiveness of the craft beer industry. Conversely, the COFECE ruling has improved market access for craft brewers, challenging the dominance of larger corporations. Together, these legislative frameworks illustrate the dual role of regulation in both constraining and enabling industry growth. This research contributes to the academic discourse by providing a detailed analysis of legislative impacts on a regional craft beer industry. It offers insights for policymakers and stakeholders to create more supportive environments for local cultural industries. By shedding light on the unique challenges and strategies within Sonora's craft beer sector, this research underscores the potential for craft beer to drive regional economic development and cultural preservation, emphasizing the need for supportive policies that nurture the growth of this creative and culturally significant sector.