Brown-Forman CEO Calls Canada’s US Alcohol Ban Harsher Than Tariffs

A Deep Dive into the Trade Dispute’s Impact on Jack Daniel’s Maker / Reuters 

The maker of Jack Daniel’s whiskey, Brown-Forman Corporation, finds itself caught in the crosshairs of an escalating trade dispute between the United States and Canada, with its CEO, Lawson Whiting, describing Canada’s decision to pull American alcohol products from store shelves as a measure far more severe than traditional tariffs. This bold statement came during a recent earnings call, spotlighting how Canadian provinces are retaliating against newly imposed US tariffs under President Donald Trump’s administration. As tensions rise, this move by Canada has sparked widespread discussion about its implications for the spirits industry, consumer behavior, and international trade relations. With Brown-Forman reaffirming its financial outlook despite the challenge, this article explores the full scope of the situation, delving into the specifics of the trade conflict, its effects on the company, and the broader economic landscape.

The root of this issue lies in the Trump administration’s decision to slap 25% tariffs on a wide range of Canadian goods, a policy aimed at bolstering American economic interests but one that has triggered swift and sharp countermeasures from its northern neighbor. Canada responded by mirroring the 25% tariffs on US imports, including wine, beer, and spirits, while several provinces took the additional step of removing American liquor from their retail shelves entirely. For Brown-Forman, a Kentucky-based company renowned for its Jack Daniel’s Tennessee whiskey, this has meant a complete loss of visibility in key Canadian markets. Whiting emphasized the severity of this action, noting that unlike tariffs, which increase costs but still allow products to be sold, a shelf ban wipes out sales opportunities altogether. “It’s literally taking your sales away,” he remarked, calling it a “disproportionate response” to the US levies. Despite Canada representing just 1% of the company’s global sales, the symbolic and practical impact of this retaliation has raised eyebrows across the industry.

Several Canadian provinces have spearheaded this aggressive stance, with actions varying in scope and intent. Nova Scotia’s liquor corporation, for instance, plans to phase out all US alcohol products by early February 2025, while Ontario’s Liquor Control Board has already begun pulling American brands from its stores and online catalog. British Columbia has taken a unique approach, targeting alcohol from US “red states” in a politically charged twist, a move that adds an intriguing layer to the dispute. Manitoba has also joined the fray, halting sales of American liquor at its provincial outlets. These measures reflect a growing sentiment among Canadians to favor local products, fueled by calls from leaders like Ontario Premier Doug Ford to “buy Canadian” in response to the trade spat. This consumer shift, combined with the official bans, poses a direct challenge to US alcohol brands, including Brown-Forman’s portfolio, which extends beyond Jack Daniel’s to include Woodford Reserve and Old Forester.

Financially, Brown-Forman appears well-positioned to weather this storm, thanks to Canada’s relatively small contribution to its revenue stream. In its 2024 annual report, the company pegged Canada at just 1% of total sales, a figure dwarfed by larger markets like Mexico, which accounted for 7%. During the March 5, 2025, earnings call, Whiting acknowledged the hit but expressed confidence in the company’s resilience, pointing to a reaffirmed fiscal 2025 forecast of 2% to 4% net sales growth. This optimism persists despite a 3% year-over-year drop in net sales to $1.04 billion for the latest quarter, slightly below the $1.07 billion analysts had anticipated. The company has been grappling with broader demand slowdowns in the US, Canada, and Europe, offset by gains in emerging markets like Mexico and Poland. To navigate these headwinds, Brown-Forman has implemented cost-cutting initiatives, including workforce reductions, signaling a proactive approach to a tougher economic environment for the spirits sector.

Beyond the immediate numbers, the situation underscores deeper trends and potential ripple effects. The Canadian shelf ban echoes past trade disputes, such as the European Union’s retaliatory tariffs on American whiskey from 2018 to 2021, which Brown-Forman also endured. That experience has likely honed the company’s strategies for coping with such disruptions, whether through redirecting focus to unaffected markets or adjusting pricing models. However, Whiting hinted at broader concerns, noting that the company is closely monitoring developments in Mexico, a more significant market that could follow Canada’s lead if tensions escalate further. Meanwhile, the political undertones of British Columbia’s “red state” ban suggest that trade retaliation might increasingly intertwine with ideological divides, complicating future negotiations between the two nations.

For the wider US alcohol industry, this dispute serves as a wake-up call. Brands producing California wines, Kentucky bourbons, or craft beers could face similar barriers if Canada’s actions set a precedent. Canadian consumers, already pivoting toward local alternatives, may cement these habits over time, reshaping demand patterns for American exporters. Brown-Forman’s stock saw a slight dip in extended trading following the earnings release, reflecting investor caution amid “continued uncertainty and headwinds,” as Whiting put it. Yet, the company’s ability to hold steady on its annual projections suggests a calculated resilience, bolstered by its diverse global footprint and strong brand equity.

This trade clash also highlights the intricate dance of international commerce, where economic policies can swiftly alter market dynamics and consumer loyalties. For Brown-Forman, the Canadian market may be a minor loss in dollar terms, but the principle of losing shelf space stings more than the financial impact. As the situation unfolds, with provinces rolling out their bans and US-Canada trade talks looming, the spirits giant will need to stay agile. Whether this dispute resolves through diplomacy or digs in as a prolonged standoff, its effects on Brown-Forman and the industry at large will be a case study in navigating the unpredictable currents of global trade.