New York
CNN
—
After Canada pulled American-made spirits off its shelves following President Donald Trump’s implementation of tariffs on Canadian imports, the CEO of Brown-Forman, which makes Jack Daniel’s whiskey and other liquors, blasted the move as “disproportionate.”
“That’s worse than a tariff because it’s literally taking your sales away,” said Lawson Whiting in an earnings call Wednesday, noting the “very disproportionate response” to the 25% tariffs applied this week.
Provinces across Canada have pulled American-made spirits, beer and wine off their shelves. The Liquor Control Board of Ontario said in a statement that it’s pushing shoppers to seek Canadian-made alternatives and that US products will remain off shelves until it’s “directed by the government to resume normal business.”
However, Lawson noted that Canada accounts for just 1% of the company’s total sales, so the company can “withstand” the losses. He’s also awaiting a response from Mexico, which was also slammed with a 25% across-the-board tariff, to see how the move affects business there, since it accounts for 7% Brown-Forman’s total sales.
The Distilled Spirits Council of the United States (DISCUS), a trade group that represents spirits makers, has also been vocal in its displeasure about the tariffs.
“American wines and spirits have benefitted from fair and reciprocal trade with Canada and Mexico,” DISCUS said in a statement Tuesday. “These US tariffs on Mexico and Canada will result in great harm to US companies and employees throughout the wine and spirits supply chain.”
Tariffs are just another headache for Brown-Forman because of a slowdown in demand from shoppers. In January, the company laid off around 700 employees and closed a Kentucky cooperage, where wooden barrels are produced to age whiskey and bourbon.
Following a pandemic peak in 2020 through 2022, spirit companies have been contending with slowing sales. Brown-Forman first sounded the alarm in 2023 when it reported whiskey sales were falling — a stark contrast compared to a year prior when they were soaring by double-digit percentage points.
Brown-Forman’s (BF.B) stock closed 10% higher Wednesday because the company’s outlook had already taken tariffs into account.
