- After President Donald Trump implemented a 25% tariff on Canadian imports, the Liquor Control Board of Ontario said it would pull American-made products from grocery stores, bars, and restaurants. Jack Daniels maker Brown-Forman CEO says that this move will only hurt Canada by taking away from its near $1 billion annual revenue from American-made alcoholic beverages.
As President Donald Trump imposes 25% tariffs on Canadian imports, the U.S.’s northern neighbors are responding by pulling American-made products off the shelves across the country. That’s bad news for Jack Daniels maker Brown-Forman, whose CEO Lawson Whiting said the move was “worse than a tariff.”
The Liquor Control Board of Ontario (LCBO) said it planned to implement restrictions on U.S. Beverage alcohol sales “as part of Ontario’s response strategy to U.S. Tariffs,” according to a statement earlier this week.
Additionally, LCBO has halted the ability to purchase all U.S. Products on its platforms and with its wholesale customers, “including grocery and convenience stores, bars, restaurants, and other retailers.”
The liquor board will discontinue purchases of more than 3,600 American-made products, which contribute to $965 million of its annual sales.
The LCBO told Coins2Day that the restrictions of U.S. Products will remain in place until the Ontario government says otherwise.
“That’s worse than a tariff because it’s literally taking your sales away, [and] completely removing our products from the shelves,” Whiting said in an earnings call Wednesday. “That’s a very disproportionate response to a 25% tariff.”
While Whiting expressed public dismay regarding Canada’s retaliation, he said Brown-Forman can withstand it: Canada only contributes roughly 1% of the company’s sales, he said on the call.
Brown-Forman did not immediately respond to Coins2Day’s request for comment.
On Tuesday, Canada imposed a 25% tariff on goods imported from the U.S. That include alcoholic beverages.
Trump slapped Mexico with an identical 25% tariff before delaying the move by another month on Thursday after speaking with the country’s president. Whiting says he remains watchful as Mexico resulted in 7% of Brown-Forman’s 2024 total sales.
Recently, the company has grappled with high input costs of raw materials like agave and wood barrels, and heightened prices for its whiskey brands to protect margins.
In January the company announced it would lay off 12% of its global workforce, or about 650 employees, as it looked to cut costs.
Net sales fell 3% to $1.04 billion from a year ago, compared to analysts’ estimate of $1.07 billion, according to market data provider LSEG.
Whiting is optimistic and told investors he expects Brown-Forman’s net sales to grow 2% to 4% in fiscal year 2025.
