Europe: Suntory Stockpiles Bourbon and Japanese Whiskey

Suntory Holdings, the Japanese beverage giant, is taking precautionary measures in light of potential tariff escalations under former President Trump’s trade policies. Speaking at the World Economic Forum in Davos, CEO Tak Niinami disclosed that the company has been stockpiling its whiskey products in Europe, including its Japanese whiskey and American bourbon brands like Jim Beam, Maker's Mark, and Basil Hayden. These efforts aim to safeguard against skyrocketing costs should tariffs return or increase.

The looming threat stems from the possible expiration of the tariff suspension agreement between the U.S. and the EU, set to lapse in March 2025. If no new deal is reached, tariffs on whiskey exports to the EU could double to 50%, significantly impacting the industry. Niinami emphasized the company's preparation for this scenario, citing lessons learned from past disputes, including the 2018 EU-imposed 25% tariff on American whiskey, which led to a 20% drop in exports through 2021.

The Biden administration had suspended these tariffs in December 2023, but uncertainty surrounding their renewal now casts a shadow over the liquor industry. Liquor stocks have reflected this instability, with shares of Diageo (maker of Johnnie Walker) and Pernod Ricard (maker of Jameson) down 7% and 15%, respectively, over the past six months.

Niinami warned that additional tariffs could result in higher prices for consumers and further inflationary pressures, particularly as U.S.-China trade tensions persist. He noted, “The world will be in an inflationary scenario... Inflation is the most important issue for the US.”

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