Louisville, Kentucky – The CEO of Brown-Forman, Lawson Whiting, expressed concerns on Wednesday regarding Canadian provinces removing US liquor from store shelves in response to President Trump’s tariffs. Whiting described this action as “worse than a tariff” and as a “disproportionate response” to the levies imposed by the Trump administration. These measures have been implemented by several Canadian provinces as part of retaliatory actions against the US government’s tariffs.
During a post-earnings call, Whiting emphasized the impact of having their products completely removed from shelves in Canada. He acknowledged that Canada represents only 1% of their total sales, indicating that the company could withstand the financial hit. Whiting also mentioned the 25% tariffs imposed by Canada on goods imported from the US, which includes wine, spirits, and beer.
Despite the challenges posed by the tariffs, Brown-Forman saw a positive response from investors, with shares of the company increasing by approximately 8% after reaffirming their annual forecasts. Whiting noted that the forecast already accounted for the potential impact of tariffs, demonstrating confidence in the company’s trajectory moving forward.
In addition to the situation in Canada, Whiting also highlighted the importance of monitoring developments in Mexico, a market that accounted for 7% of their 2024 sales according to the company’s annual report. While emphasizing the uncertainty and challenges in the external environment, Whiting remained optimistic about Brown-Forman’s ability to navigate through these obstacles.
The company has been facing a slowdown in demand, particularly in the US, Canada, and Europe. This decline has offset the benefits of stronger sales in emerging markets such as Mexico and Poland. To address these challenges, Brown-Forman has implemented cost-cutting measures, including reducing its workforce. Analysts have interpreted these actions as a response to the increasingly challenging environment within the spirits industry.