Tequila producers are feeling the pinch as the soaring price of agave threatens production of the spirit.
The price of the agave tequilana plant has risen six-fold in the past two years, squeezing producers at the margins and forcing them to use plants before they were ready, Reuters reports.
The agave plant takes between seven to eight years to mature, but some producers are using plants that are only four years old due to the shortage.
Younger plants create less tequila, meaning more of them have to be used and the crisis worsens.
Only 17.7 million plants are expected to mature this year, but the industry needs 42.2 million to sustain itself.
The shortage and price rises are expected to continue through to 2021 due to the plants slow maturation.
It now costs 22 pesos (NZ$1.60) for a kilo of agave, compared to 3.85 pesos in 2016.
Higher prices could affect both small and large scale providers as the drink moves from a cheap student's night out to top shelf drink.
"At more than 20 pesos per kilo, it's impossible to compete with other spirits like vodka and whisky," small scale tequila producer Salvador Rosales told Reuters.
"If we continue like this a lot of companies will disappear."
"The growth has overtaken us. It's a crisis of success of the industry," said Francisco Soltero, director of strategic planning at Patron.
"We thought that we were going to grow a certain amount, and we're growing double."
The industry is also facing competition from the lifestyle industry for the plants, as the supplement inulin and various sweeteners use the product.
Newshub.
