In brief
Brown-Forman's CEO describes Canada's actions as "worse than tariffs," highlighting the impact on sales and local businesses.
In a significant response to US tariffs on Canadian goods, several Canadian provinces, including Ontario, have removed US-made alcoholic beverages from store shelves. This move has been labeled "worse than tariffs" by Lawson Whiting, CEO of Brown-Forman, the company behind the iconic Jack Daniel's brand. The action comes as a direct counter to the 25% tariffs imposed by the Trump administration on a range of Canadian imports.The Liquor Control Board of Ontario (LCBO), one of the largest alcohol buyers globally, took this step earlier this week, altogether removing US alcoholic drinks from its offerings. Whiting expressed concerns that such measures are disproportionate, stating that they effectively eliminate sales opportunities rather than just impose financial penalties. "That's worse than a tariff, because it's literally taking your sales away," he voiced.Canada has retaliated against US trade practices with reciprocal 25% tariffs on goods, including spirits and beers. Premier Doug Ford of Ontario remarked that the LCBO’s US alcohol sales amounted to nearly $1 billion annually, emphasizing the significance of this decision. With the LCBO being the sole wholesaler in the province, this restriction will greatly limit retail, bar, and restaurant access to US products.Despite the turmoil, Whiting noted that Canada represents only 1% of Brown-Forman’s overall sales, suggesting the company can manage the repercussions. Meanwhile, the LCBO suggested that Canadians explore local alternatives, a trend already gaining traction as many shift towards domestic products due to the tariffs.Prime Minister Justin Trudeau criticized the US trade measures as foolish and accused President Trump of seeking an economic downfall for Canada, a sentiment echoed by Foreign Minister Mélanie Joly, who remains wary of Trump's remarks on potential annexation. In a broader context, Trump's administration has also imposed similar tariffs on Mexico, intensifying the trade tensions throughout the region.As the situation evolves, Brown-Forman will monitor developments in Mexico, where they recorded 7% of their sales in 2024, highlighting the complex web of trade relationships impacted by current policies and rhetoric.
