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Liquor giant Brown-Forman said Canada’s boycott of U.S. alcohol, sparked by President Donald Trump’s tariffs, continues to reduce imports, with sales in Canada down 62 per cent in the second quarter.
Although Canada only accounts for about 1% of Brown-Forman’s total sales, the continued absence of Canadian products in many of its stores is having an impact on overall sales. Total net sales for the quarter were $1 billion, down 5% year-over-year.
The decline also affected the company’s portfolio of ready-to-drink Jack Daniel’s. down 4% In the first half of the fiscal year.
As Canadian consumers protest Trump’s tariffs, only two states continue to sell American alcohol. According to BBC. While most have pulled inventory from their shelves to promote Canadian-made products, some states have decided to sell their remaining American inventory to raise money for charity.
Growth at Brown-Forman’s Diplomático and Glendronach, which produce outside the U.S., was not enough to offset declines in other regions, executives said. Last week’s earnings announcement.
“The continued unavailability of our U.S. alcohol products in Canada has had a significant impact on our top line performance,” CFO Leanne Cunningham said on the earnings call. “While we remain hopeful that U.S. products will return to Canadian store shelves, we continue to assume these headwinds will persist.”
The company expects full-year net sales to decline in the low single-digit range.
Last March, Brown-Forman CEO Lawson Whiting said Canadian retailers would not allow U.S. alcohol into their stores. worse than tariffs.
Dan Su, an equity analyst at Morningstar Research Services, said earnings reports from several Canada-based grocers appear to indicate that anti-American sentiment among Canadian consumers has eased significantly, which could pave the way for Brown Forman to return to the country.
“Friction between the two countries over tariff issues appears to have eased in recent months. We hope retailers (and) smaller liquor stores will put Brown-Forman products back on their shelves,” Su said in an interview. “But it will probably take a few quarters, and it will continue to be a headwind for the company within this period.”
