Brown-Forman’s CEO says Canada pulling US alcohol from shelves ‘worse than a tariff’

Import tariffs from the Trump administration continue to disrupt the spirits industry, but is retaliating by removing US alcohol from shelves doing more harm than good?  The global spirits industry is navigating turbulent waters as recent US trade policies under President Donald Trump have led to escalating tariff disputes. Such measures, that in the current climate are constantly evolving, have prompted retaliatory actions from key trading partners, notably affecting major players in the drinks industry. In response to the US tariffs, Canadian province Ontario recently removed American liquor from their store shelves. Yesterday (5 March) Brown-Forman's CEO, Lawson Whiting, criticised the move, stating its "worse than a tariff" and a "disproportionate response" to levies imposed by the Trump administration, Reuters reported. "I mean, that's worse than a tariff, because it's literally taking your sales away, and completely removing our products from the shelves," Whiting said on a post-earnings call. Although only 1% of the company's sales come from Canada, this action is part of broader retaliatory measures, including a 25% tariff on US goods, as Canadians favour local products over imported ones.

Brown-Forman's financial performance

The renowned producer of Jack Daniel's has reported a 3% decrease in net sales for the quarter, amounting to US$1.04 billion. The downturn is attributed to declining demand in markets such as the US, Canada and Europe. Despite these challenges, Brown-Forman maintains its annual forecasts and has implemented cost cutting strategies, including workforce reductions, to navigate the current market environment. The company projects a 2% to 4% sales growth for fiscal 2025. The ripple effects of these trade tensions extend beyond North America, as Japanese companies like Sony and Suntory are stockpiling inventory in the United States and considering supply chain adjustments in anticipation of potential US tariffs. The drinks industry has recently voiced concerns. The 'Toasts Not Tariffs' coalition, compromising 52 US drinks businesses, has appealed to President Trump, warning that new tariffs on imported wine and spirits could harm American businesses, potentially leading to significant job losses and decreased sales.