U.S. drinkers will pay more for cocktails, champagne and foreign beers, brands will disappear from bar menus and jobs will be lost on both sides of the Atlantic as a result of U.S. President Donald Trump's reciprocal tariffs, drinks industry bodies said on Thursday.
Trump's latest round of sweeping global and country-specific tariffs was set to hit everything from the popular negroni cocktail, based on Italy's Campari (CPRI.MI) liqueur, to Guinness beer, made by the world's top spirits producer Diageo (DGE.L).
He also introduced a 25% levy on all beer imports and added beer cans to existing aluminium tariffs, hitting labels, such as Mexican-made Corona (STZ.N) and Dutch Heineken (HEIN.AS).
Many categories of drinks, such as champagne or Scotch whisky, have to be made in specific countries or regions and cannot move production.
Edward Mundy, analyst at Jefferies, noted the worst threats of a 200% tariff on European alcohol and 25% tariffs affecting Mexican tequila and Canadian whisky had not materialised.
Spirits and beer stocks were trading largely flat on Thursday, while producers like Diageo and Campari saw shares rise as tequila-related tariffs were avoided.
But industry bodies said the levies laid out on Wednesday were already high enough to hurt sectors that rely heavily on U.S. drinkers for sales. European spirits exports alone stood at 2.9 billion euros ($3.18 billion) in 2024, according to trade body spiritsEurope.
French groups and officials warned of a 20% slide in sales and mass layoffs in regions like Cognac, where French brandy is produced for export, largely to the U.S. and China.
"Many labels, which cannot be replaced by local production, will disappear from the tables of U.S. consumers, while a serious production and employment crisis is looming in Italy and Europe," Micaela Pallini, president of Italian trade association Federvini, said in a statement.
Japanese drinks maker Suntory said it will focus on selling spirits in countries where they are made as a result of tariffs.
Chris Swonger, president and CEO of the Distilled Spirits Council of the United States, said the spirits industry has enjoyed mostly zero-for-zero tariffs for decades and needed to be disentangled from the trade problems Trump wanted to solve.
The tariffs exposed U.S. spirits, such as bourbon whiskey, to retaliation and threatened U.S. jobs linked to European spirits imports, such as in wholesale or hospitality, Swonger and spiritsEurope said.
Major spirits and beer producers either declined to comment or did not immediately respond to requests for comment.
($1 = 0.9116 euros)
