The CEO of Brown-Forman, the maker of Jack Daniel’s, recently expressed concerns regarding the decision by Canadian retailers to remove U.S. alcohol from their shelves in protest of President Donald Trump’s trade policies. During the company’s quarterly earnings call, CEO Lawson Whiting stated that this move by Canadian retailers is more damaging to the company’s finances than the actual tariffs imposed.
Whiting emphasized that blocking consumers from purchasing American-made products in Canada or other countries is a significant blow to U.S. companies. He mentioned that removing their products from shelves is a disproportionate response to the 25% tariff imposed.
While Canada only accounts for 1% of Brown-Forman’s sales, the company is more concerned about the potential impact of broader tariffs in the European Union. Whiting stated that they are preparing for the possibility of similar retaliatory measures by EU countries.
Analysts have also weighed in on the situation, with Morgan Stanley analyst Eric Serotta highlighting the unique challenges tariffs pose for Brown-Forman. He mentioned that a significant portion of the company’s sales come from outside the U.S., and bourbon laws require domestic production, making it impossible to produce internationally.
Robert Moskow, an analyst with TD Cowen, expressed concerns that other U.S. products could also be at risk due to aggressive U.S. trade policies. He suggested that consumer boycotts on other American brands like Budweiser, Hershey, and Heinz could be a possibility.
The Liquor Control Board of Ontario, one of the largest importers of American alcohol in Canada, recently announced that they have stopped purchasing U.S. products in response to the tariffs. They are advising Canadians to buy products manufactured in Canada instead.
The tariff situation is rapidly evolving, with the White House postponing the enactment of 25% tariffs on some goods from Canada and Mexico for one month. However, a significant percentage of products imported from Canada would still face tariffs due to non-compliance with the United States-Mexico-Canada free trade agreement.
Canadian Prime Minister Justin Trudeau also announced that 25% tariffs would be levied against American imports, with these duties still in place as of Friday morning. The ongoing trade disputes between the U.S. and its trading partners continue to impact businesses and consumers on both sides of the border.
