Brown-Forman, the producer of Jack Daniel’s, has condemned the removal of American-made alcoholic beverages from store shelves in Canada, calling it a response that is “worse than a tariff.” Several Canadian provinces, including Ontario and Nova Scotia, have enacted these measures in retaliation for the 25% tariffs imposed by U.S. President Donald Trump on Canadian imports.
The Liquor Control Board of Ontario (LCBO), one of the world's largest alcohol buyers, has stopped selling U.S. alcoholic products entirely. Ontario Premier Doug Ford stated that the LCBO previously sold nearly USD 1 billion worth of American liquor annually, but as of this week, every U.S. product has been removed from the shelves. This decision impacts not only retail sales but also bars and restaurants, which depend on LCBO distribution.
Lawson Whiting, CEO of Brown-Forman, the parent company behind major American whiskey brands Jack Daniel's and Woodford Reserve, expressed concerns over the policy’s impact, noting that while tariffs increase costs, removing products from shelves eliminates sales entirely. However, he emphasized that Canada represents only 1% of the company’s total sales, making the financial hit manageable. He also indicated that the company is closely monitoring developments in Mexico, which accounted for 7% of its 2024 sales.
The Canadian government, led by Prime Minister Justin Trudeau, has strongly opposed the U.S. tariffs, with Trudeau calling them “a very dumb thing to do.” He further accused the Trump administration of attempting to destabilize Canada’s economy for strategic gains. These tensions have fueled anti-U.S. sentiment among Canadian consumers, many of whom have been shifting their purchases towards local products.
Despite the challenges, Brown-Forman reaffirmed its annual financial forecast, which had already factored in the potential effects of tariffs. The company has faced headwinds this year, including slowing demand in North America and Europe, though it continues to see growth in emerging markets such as Mexico and Poland.
Meanwhile, the broader liquor industry is bracing for potential disruptions in Mexico, where the U.S. has also imposed 25% tariffs. Trump has temporarily exempted the country’s car manufacturers but has criticized both Canada and Mexico for their handling of fentanyl trafficking, an allegation both nations reject.
Brown-Forman's stock showed only a marginal decline in after-hours trading, reflecting investor confidence in the company's ability to navigate the escalating trade tensions.
