Factbox: From Johnnie Walker to Corona beer, major alcohol firms could see tariff hit
03/02/2025 16:18
Feb 3 (Reuters) - Makers of alcoholic beverages,
including Johnnie Walker and Corona beer, could be caught in the
crosshairs of a potential trade war after U.S. President Donald
Trump imposed sweeping new tariffs on goods from Mexico, Canada
and China.
In three executive orders, Trump imposed 25% tariffs on
Mexican and most Canadian imports and 10% on goods from China,
starting on Tuesday.
Canada and Mexico both responded by announcing retaliatory
tariffs, Mexican President Claudia Sheinbaum said on Monday that
tariffs with the United States are on hold for a month after a
conversation with Trump.
Here is a list of global beverage companies likely to see an
impact:
DIAGEO DGE.L
The British beverage company, known for brands such as
Johnnie Walker and Smirnoff, has about 46% exposure to imports
from Mexico and Canada, according to a Jefferies note. The
brokerage firm expects fiscal 2025 forecast to be revised when
the company reports on Tuesday.
The Don Julio and Casamigos maker's end-to-end tequila
production is in Mexico. In September 2021, the company
announced a $500 million investment to expand its manufacturing
footprint in Mexico. Diageo shipped some $1.6 billion worth of
tequila to the U.S. last year, Reuters reported.
PERNOD RICARD SA PERP.PA
The French company, which produces well-known spirits such
as Absolut Vodka and Jameson Irish Whiskey, has production sites
in Canada, Mexico and China with about 6.3% of sales from Mexico
and Canada imports, according to Jefferies.
Affected brands include Codigo 1530 tequila and Jefferson's
bourbon whiskey.
CAMPARI CPRI.MI
The company, whose products include the popular Aperol
aperitif, faces reasonable risk as tequila sold in the U.S.
accounts for 7% of group sales and has been a key driver to its
performance in the country, according to J.P. Morgan.
Campari has a production facility in Canada, and its
facility in Mexico produces spirits brands like Gran Centenario
and Espolon, according to its website.
ANHEUSER-BUSCH INBEV ABI.BR
Budweiser and Stella Artois owner AB InBev could see growth
in its market share at the cost of its peers since a major
portion of its portfolio is sourced from within the U.S.,
according to J.P. Morgan.
However, the brokerage noted that a significant percentage
of its earnings before interest and tax (EBIT) comes from
Mexico, which could be impacted by tariffs, weakening demand for
some of its products.
BROWN-FORMAN BFb.N
The All-American spirits company, which produces Jack
Daniel's Tennessee Whiskey, faces tariffs on its tequila
portfolio in Mexico, accounting for a mid-single digit
percentage of U.S. sales, according to J.P. Morgan
Brown-Froman is also subject to retaliatory tariffs from
Canada and Mexico, which will weigh on its American whiskey
portfolio, including its flagship brand Jack Daniel's.
Canada and Mexico make up 1% and 7% of its 2024 total sales,
according to the company's 2024 annual report.
CONSTELLATION BRANDS STZ.N
The Corona and Modelo Especial beer maker has a total
production capacity of about 48 million hectoliters in Mexico,
which is anticipated to rise to about 65 million hectoliters by
fiscal 2028, according to the latest annual report for the year
ending February 2024
J.P. Morgan noted that about 85% of Constellation Brands'
consolidated sales are derived from Mexican beer and could
potentially see a mid-20's percentage impact to earnings per
share if no pricing or cost savings initiatives is taken.
MOLSON COORS BEVERAGE TAP.N
Miller Lite maker Molson Coors has exposure to tariffs
through Molson Canadian, although J.P. Morgan believes the
impact would be "de minimis."
The brokerage added that Canada's retaliatory tariff impact
on American beer would be limited too as the company produces
Coors Light and Miller Lite locally in Canadian breweries.
HEINEKEN HEIN.AS
Dutch brewer Heineken could see some modest impact as
Mexican imports for the company are around low-single digit
percentage of the group's sales, according to Jefferies.
BECLE CUERVO.MX
Jose Cuervo owner Becle, a Mexican-based company and one of
the world's biggest tequila maker, along with Diageo, dominates
the U.S. market for the agave-based drinks and rely heavily on
tequila sales in the U.S. for growth.
Becle's U.S. shipments of eight tequila or mezcal brands had
a sales value of almost $1.6 billion, according to a Reuters
analysis.
(Reporting by Ananya Mariam Rajesh and Aamir Sohail in
Bengaluru; Editing by Tasim Zahid)
((AnanyaMariam.Rajesh@thomsonreuters.com ; X: https://twitter.com/AnanyaMariam;))