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The CEO of Jack Daniel’s maker Brown Forman said the decision by Canadian retailers to remove alcohol from the shelf to protest President Donald Trump’s trade policy would damage the company’s finances more than actual tariffs.
Spirit Maker’s Quarterly revenue calls On Wednesday, CEO Lawson Whiting said stopping consumers from purchasing American-made products in Canada and other countries would be an overwhelming blow to US companies.
“It’s worse than tariffs because it literally takes away your sales completely and removes our products on the shelves,” Whiting told investors. “It’s a very unbalanced response to the 25% tariff.”
Whiting said Canada accounts for only 1% of Brown Forman’s sales, but the company said it is more concerned about the potential impact of wider tariffs in the European Union. The CEO said the Kentucky-based alcohol maker is planning a similar retaliation action by EU countries.
In a memo to investors, Morgan Stanley analyst Eric Cerlotta said tariffs present a unique challenge for Brown Forman, and that the effect is likely to remain. He added that 55% of liquor manufacturers’ sales come from outside the US and that the bourbon law requires domestic production and therefore cannot be produced internationally.
TD Cowen analyst Robert Moskow has expressed concern that other US products could be at risk.
“Given the early response we saw in Canada, we wouldn’t be surprised if the US aggressive trade policy led to consumer boycotts of other American brands beyond whiskey (Budweiser, Hershey, Heinz),” he told investors.
Earlier this week, Ontario’s Liquor Commission (one of Canada’s largest importers of American alcohol and representing 3,600 products) said in a statement “We have stopped purchasing all US products.” The group advises Canadians to purchase products manufactured in Canada.
The tariff situation is quickly evolving.
On Thursday, the White House postponed the enactment of a 25% tariff imposed on some products from Canada and Mexico for a month amid concerns about a potential economic fallout. However, about 62% of products imported from Canada will continue to face tariffs as they do not comply with the US-Mexico-Canada free trade agreement. The AP reported.
Canadian Prime Minister Justin Trudeau It was announced on Monday Those obligations are still in place as of Friday morning, in a statement that a 25% tariff will be collected on American imports.
