Modelo plans to expand capacity at one of its plants in the south of the country. The company has announced plans to increase production at its Tuxtepec brewery, in the state of Oaxaca, by 9m hectolitres, from its current capacity of 7m hectolitres. The extra beer will supply southern Mexico and be exported to Central and South America.

The expansion of Tuxtepec, planned to be completed by the end of 2006, is part of Modelo's aim to reach a total capacity of 60m hectolitres. The Tuxtepec brewery will consequently become the company's second-largest, after its 20m-hectolitre Zacatecas plant.

At a news conference, CEO Carlos Fernandez Gonzalez told reporters that growth for domestic sales volumes this year would be in line with earlier guidance given by Modelo of between 2% and 3%, but could turn out higher. "The reality is that things are going very much in line with what we announced a few weeks ago," Fernandez said.

Earlier this year, Modelo raised beer prices by around 4% in some regions of Mexico.