Jack Daniels Maker Worried About Trade War Impact

Jack Daniels maker Brown-Forman says that tariffs are beginning to make it hard for the company to plan for its future.

The company posted strong revenue as well as growth for its full fiscal year through April and is expecting to post more gains moving forward.

However, it stated that competition across the developed world added to the potential for retaliatory tariffs being placed on American-made spirits, means it has become difficult to accurately give a prediction for future results.

U.S. bourbon is a product that has been targeted by governments of other countries in retaliation for the tariffs placed by the White House administration on aluminum and steel imports from Canada, Mexico, the European Union and more.

On Tuesday of this week, Mexico placed a tariff of 25% on bourbon. Canada as well as the EU threatened the same for bourbon and whiskey as early as July.

A statement released by the government of Mexico said that it was necessary along with urgent to impose these measures that are equal to those measures the U.S. has implemented.

Mexico has said last week it has intentions of retaliating against the tariffs place on aluminum and steel that that are imported into the U.S.

The different products that the Mexican government has listed that will be levied an import tariff include Tennessee Whiskey, along with bourbon.

While at times Jack Daniels is referred to affectionately as bourbon, that name is derived from the area in which the drink was first made Bourbon County, Kentucky, but Jack Daniels’ home is Tennessee.

Therefore, if reading the label one can see that Jack Daniels calls itself a Tennessee whiskey and not bourbon.

Spirits purveyor Brown-Forman said over 53% of its overall sales are generated outside the U.S. France, Germany, Poland and the UK represent approximately 18% of the company’s overall sales when combined, while Mexico alone accounts for as much as 5% of the overall sales.

The retaliator tariff threats by trading partners of the U.S. are the biggest reason that the United States Chamber of Commerce said that over 2.6 million jobs are at jeopardy because of the hardline stance the White House has taken on imports.

A survey of CEOs in the U.S. showed that many have decided to scale back hiring as well as spending due to worry of an all-out trade war.

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