B-F CEO: Canada reaction 'worse than a tariff'

DUANE CROSS
MCO Publisher • Editor

Jack Daniel’s, one of America’s most iconic whiskey brands, is facing unexpected headwinds in Canada. Several provinces have removed U.S. liquor from store shelves in response to tariffs imposed by the Trump administration.

Brown-Forman, the maker of Jack Daniel’s, called the move a “disproportionate response” that goes beyond the impact of tariffs.

“I mean, that’s worse than a tariff because it’s literally taking your sales away, [and] completely removing our products from the shelves,” CEO Lawson Whiting said during a post-earnings call Wednesday.

Canada also imposed 25 percent tariffs on U.S. goods, including spirits, wine, and beer. While Canada accounts for only 1 percent of Brown-Forman’s total sales, Jack Daniel’s remains a globally recognized brand, and any restrictions on its availability could impact market presence and long-term customer loyalty.

Whiting said the company is monitoring the situation in Mexico, which makes up 7 percent of Brown-Forman’s sales and could be a more significant market risk if trade tensions escalate further.

Despite these challenges, Brown-Forman reaffirmed its annual forecasts, reassuring investors. Shares rose about 8 percent following the announcement.

However, the company continues to face a broader slowdown in demand across key markets, including the U.S., Canada, and Europe. This has offset growth in emerging markets like Mexico and Poland.

Brown-Forman, which has implemented cost-cutting measures, including workforce reductions, saw net sales decline 3 percent year-over-year to $1.04 billion, falling short of analysts’ estimates of $1.07 billion.

Despite ongoing trade uncertainties, the company expects net sales growth of 2 to 4 percent in fiscal 2025.

Jack Daniel’s, Brown-Forman’s flagship brand, remains a cornerstone of the company’s portfolio. While the Canadian ban may not significantly dent overall sales, the situation underscores the growing challenges faced by American whiskey in an increasingly volatile global trade environment.