Brown-Forman, a leading spirits company, has reported a significant decline in sales in Canada due to an ongoing boycott of U.S. alcohol sparked by President Donald Trump’s tariff policies. Sales in the country dropped by 62% in the second quarter, impacting the company’s overall earnings. Despite Canada accounting for only 1% of Brown-Forman’s total sales, the absence of its products from most stores in the country has had a noticeable impact on its top line. Total net sales for the quarter decreased by 5% year over year to $1 billion.
The boycott also affected the company’s Jack Daniel’s portfolio, which saw a 4% decline in the first half of the fiscal year.
Canadian consumers have been protesting Trump’s tariffs, leading to the removal of U.S. alcohol from store shelves in most provinces. Only two provinces are still selling American alcohol products, according to the BBC. Some provinces have even sold off their remaining U.S. inventory to raise funds for charity.
While Brown-Forman’s non-U.S. products like Diplomático and the Glendronach showed growth, it was not enough to offset the declines in other areas, as discussed in an earnings call by company executives.
CFO Leanne Cunningham highlighted the impact of the boycott on the company’s performance, expressing hope for the return of American products to Canadian shelves but anticipating the persistence of this challenge.
The company expects a low-single digit decline in full-year net sales and is monitoring the situation closely for any changes in consumer sentiment.
Despite the challenges, there are signs that the anti-U.S. sentiment in Canada may be easing, potentially opening the door for Brown-Forman’s products to make a comeback in the country in the coming quarters.