UPDATE 2-Jose Cuervo tequila maker Becle's earnings slide on exchange rate hit

(Adds details of U.S., Canada markets)

By Kylie Madry

MEXICO CITY, April 27 (Reuters) - Mexican distiller Becle, the world's largest tequila producer, on Thursday posted a nearly 10% slump in first-quarter net profit as price increases failed to cushion negative currency exchange effects and high inflation.

The Mexico City-based firm, which sells Jose Cuervo family tequilas as well as mezcal, whiskey and other liquors, reported a net profit of 1.22 billion pesos ($67.9 million) for the first three months of 2023.

Revenues, however, rose 5.7% to 9.58 billion pesos as the company shifted more product at higher prices in all regions except the United States and Canada.

Becle makes most of it sales in the United States and Canada. In the U.S., it hopes that growing thirst for tequila - distilled from the agave plant - will help it leapfrog vodka to become the country's most valuable spirit this year.

But the appreciation of the Mexican peso against the dollar as well as fewer sales of its "ready-to-drink" cocktails in the U.S. and Canada saw both volumes and net sales slip over the quarter in the region.

Worldwide, however, Jose Cuervo tequila volumes surged 8.5% from a year earlier, while other tequila brands shot up 25%. Becle's "ready-to-drink" category slipped 19% overall from a year earlier and non-alcoholic drink volumes fell some 9%.

Becle started the year with good momentum amid challenging economic conditions, an inflationary environment and exchange rate headwinds, it said in a stock exchange filing.

"Despite the environment, we have been increasing prices across our regions in order to offset input cost inflation," it added.

Becle is looking to attract consumers to more premium products with better margins to boost income, company executives have said.

The firm's first-quarter earnings before interest, tax, depreciation and amortization (EBITDA) fell 17.8% to 1.80 billion pesos.

In February, Becle predicted its 2023 sales would grow by "high single digits to low teens" this year, while U.S. and Canada volumes should grow by a "mid single-digit." ($1 = 18.0201 pesos by end-March) (Reporting by Kylie Madry and Carolina Pulice; Editing by Sarah Morland and Jamie Freed)