Suntory Holdings Prepares for Potential Whiskey Tariffs
Suntory Holdings is bolstering its whiskey inventory in Europe to mitigate the potential impact of impending tariffs from the Trump administration. The company's CEO, Tak Niinami, has acknowledged the threat of a trade war and the negative consequences it could have for the liquor industry.
In 2018, the European Union levied a 25% tariff on American whiskey, prompting a retaliatory 25% import tariff from the Trump administration on single malt scotch whisky. The EU later suspended these tariffs, but the suspension is set to expire in March 2023.
Suntory, which owns both Japanese whiskey and bourbon brands such as Jim Beam, Maker's Mark, and Basil Hayden, is preparing for the re-imposition of tariffs that could reach 50%. Niinami believes that higher tariffs could lead to increased consumer prices and a difficult inflationary scenario for the global economy.
The potential tariffs have had a negative impact on the stock prices of major alcoholic beverage companies. Suntory Holding's stock has dropped 13% in the past six months, while shares of Diageo and Pernod Ricard have declined by 10% and 22%, respectively.
Niinami emphasized the importance of considering the potential impact of inflation on the U.S. economy and the political ramifications for the Trump administration as it approaches midterm elections. He believes that inflation is the primary concern for the United States and that the government will have to address it.