Bourbon makers say they’ve caught up with demand, need to ‘get rid of these tariffs’

Greg Hughes, president of Suntory Global Spirits, maker of Jim Beam as well as Maker’s Mark; Kate Latts, co-president of Heaven Hill Brands, maker of Evan Williams; and Lawson Whiting, CEO of Brown-Forman, maker of Jack Daniel’s Tennessee Whiskey as well as Woodford Reserve bourbon, spoke about the general state of their business.

The occasion? The James B. Beam Institute Industry conference at the University of Kentucky on Monday that drew over 1,000 bourbon and distilling industry insiders and students to Lexington this year.

“There’s still a big world out there for us to grow the industry in,” Hughes said. “India’s a huge opportunity market for the spirits industry ... there’s a bunch of beer markets out there ... that we can source volume from. ... If we can get 5 (percent) of the Scotch market in India, we’ll have all the distilleries in Kentucky full.”

India is the world’s biggest whiskey market with very little exposure to bourbon so far. Likewise for China and other Asian countries such as Vietnam where the predominant drink is beer.

Demand for bourbon has definitely weakened on the home front, they all acknowledged, as the COVID-era buying spike has been tempered by inflation and tightening American pocketbooks.

But they have eyes on the horizon, if only they can get around one big obstacle: Tariffs.

Bourbon makers are facing retaliatory tariffs on several fronts in President Donald Trump’s ongoing trade war. The European Union has threatened to impose a 200% tariff on bourbon, among other items, on April 1. Meanwhile, Canadian stores have pulled U.S. spirits off their shelves entirely in response to Trump’s threat to impose tariffs on imports from Canada in an attempt to spur manufacturing in the U.S.

Whiting, of Brown-Forman, said that he thinks it’s a good sign that the EU announced an deadline two weeks out: There’s time to negotiate, and he seemed optimistic that they could reach a deal on alcohol that would keep French wine coming in and Kentucky bourbon flowing out.

“That is a very good sign in my mind,” Whiting said. “Both administrations have some time to work things out and let’s hope that’s what they do.”

Curiously, at no time during the discussion on tariffs did anyone mention Trump by name; rather, they all walked a fine line, expressing regret for something that cost their companies millions last time, without explicitly criticizing Trump’s economic agenda.

Don’t be taken in by media negativity, Latts said.

“On the whiskey inventory front, my dad, who is sitting in the front row, Max Shapira, has been at this industry and game of bourbon production for over 55 years and he can say one thing: ‘You never have exactly the right amount ... you either have too little or you have too much,’” she said.

“We’ve all increased production to catch up with demand and now we’ve caught up. So now we’re ready. We’re ready. And when these tariffs go away we’re ready to experience ... the unknown demand that exists across the entire world. If we could just get, as Greg said, a little bit of that Scotch and beer consumption, we’re going to be in a place where we don’t have enough.

“So first we need to get rid of the tariffs and then we can make that all happen.”