(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
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
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
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
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
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