Donald Trump’s planned tariffs pose challenges for the US alcohol industry

By: Trademagazin Date: 2024. 11. 29. 11:03

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US presidential candidate Donald Trump has proposed a 25% tariff on products from Canada and Mexico, which could have a major impact on the US alcohol industry. The proposed measure would hit beer and tequila producers particularly hard, and would also put significant financial pressure on smaller businesses. Industry players are already preparing for the potential consequences, while experts warn that consumers will not be able to avoid higher prices either.

Price hikes are inevitable

The alcohol industry is watching the developments related to tariffs with concern. Dave Williams, president of Bump Williams Consulting, stressed that many companies have no choice but to pass on the cost increases to consumers. Even larger companies such as Constellation Brands, which imports popular products from Mexico such as Modelo and Corona beers, as well as Casa Noble tequila, would not be able to avoid the changes. In their case, the tariffs could lead to a 16% increase in costs, which would translate into an increase in consumer prices of about 4.5%.

International Impact of Tariffs

The planned tariffs could also trigger retaliation from other countries. Chris Swonger, president and CEO of the Distilled Spirits Council, warned that when tariffs are imposed on imported spirits, target countries often retaliate by imposing similar tariffs on U.S. exports. This could be particularly damaging to U.S. whiskey and bourbon exports, which could also threaten the industry’s global competitiveness.

Preparing for the Worst

Although the tariffs are still in the planning stages, businesses are already preparing for the potential consequences. Some companies have begun to upgrade their technology and stockpile. For example, New Jersey restaurant and tequila bar Meximodo has tripled its tequila orders to mitigate the impact of the expected tariffs. Saurabh Abrol, CEO of Le Malt Hospitality Group, said: “We didn’t want to take any chances.”