Suntory Holdings’ CEO has reportedly suggested some international consumers may shun its US brands should President Trump proceed with tariffs.
In an interview with the Financial Times, Takeshi Niinami said the company was planning on exporting fewer US goods to Europe, Mexico and Canada as it expected drinkers might avoid US brands in light of the tariffs threat.
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“We laid out the strategic and budget plan for 2025 expecting that American
products, including American whiskey, will be less accepted by those countries
outside of the US because of first, tariffs and, second, emotion,” Niinami said.
“Our plan is less exports from the US to other countries like [in] Europe, Mexico
and Canada.”
He added that the company needs “to be more focused on the US to sell American
whiskey”.
Trump’s plans to slap tariffs on imports from Canada and Mexico came to a halt earlier this week following negotiations with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau, and their agreement to spend big on tightening up security at their borders with the US.
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By GlobalDataThe tariffs have been paused for a month, but a 10% tariff on Chinese imports has gone ahead, leading to Beijing reciprocating, saying it will place tariffs on goods including agricultural machinery, coal and natural gas.
Despite the initial pause, multiple spirits majors have shared their worries around the potential impact of US tariffs.
Following the release of Diageo‘s first-half results on Tuesday (4 February), CFO Nik Jhangiani told analysts on a call that while it was still “a pretty fluid situation”, potential tariffs could have a $200m profit impact on the business.
“If you look forward now planning for 1st March, so four months, we are talking about circa $200m of gross exposure on operating profit, with 85% of that being largely on tequila, which is an industry-wide issue. So, keep that in mind,” he said.
The Tanqueray distiller also announced it was pulling its medium-term guidance for organic top-line growth of 5-7%, in light of macroeconomic and geopolitical uncertainty”.
Alongside its results, the group revealed initial details on its tariff mitigation plan, which included managing pricing and promotions, inventory, re-allocating investments and optimising its supply chain.
On the analysts call, Jhangiani said he expected the plan could “mitigate approximately 40%” of that operating profit impact.
He also stressed, for now at least, the mitigation plan “does not include anything on pricing”.
French spirits major Pernod Ricard, which released its half-year results early today (6 February), cut its annual sales forecast, announcing that instead of seeing a return to growth it now expected organic net sales to drop at a “low-single-digit” rate during its 2024/25 financial year, which runs to the end of June.
Pernod Ricard gave some outline thoughts on how it sees subsequent financial years, describing 2025/26 as “a transition year”. The Absolut vodka owner expects “improving trends” in net sales but says its results are “conditional on the challenges posed by the global tariff environment”.
On a call with analysts earlier in the day, the company’s CFO Hélène de Tissot said she expected global tariffs, including the preliminary ones imposed by China and those from the US, could result in roughly a €200m ($207m) impact on the business.
“So, the global envelope, if I am referring to an annualized basis, would be €200m euros for both China and US. China, we mentioned already that our estimate was around €130 to €140m euros, no change on that.
“You can estimate what is at stake in the US with obviously lots of uncertainty. But these numbers is covering our estimate of what could be the impact of the 25% tariff in Canada, Mexico and 10% in Europe.”
