The makers of Brough Brothers bourbon in Kentucky were excited to implement their business plan with the upcoming opening of a new distillery. They aimed to increase whiskey production to enter new markets in Canada and Europe. However, the threat of tariffs has disrupted their plans, causing the Black-owned distillery to put their efforts on hold in Canada, Germany, and France.
CEO Victor Yarbrough expressed frustration over the situation, highlighting how the global appeal of American spirits has been affected by trade conflicts initiated by President Donald Trump. Despite their hopes to expand and raise their profile in the competitive bourbon industry, the uncertainty surrounding tariffs has left their future uncertain.
Yarbrough emphasized the need for repairing relationships and engaging in a media and PR blitz to navigate through the trade conflicts. The ongoing trade wars pose a threat to the success of American-made products like bourbon, impacting consumer prices and business operations.
Kentucky Governor Andy Beshear criticized the unpredictable tariff policy, stating that it disrupts stability and harms the economy. With the recent postponement of tariffs on imports from Canada, Brough Brothers Distillery’s expansion plans remain in limbo, underscoring the challenges faced by bourbon makers trying to navigate through the public relations implications of trade conflicts.
The impact of the president’s “America First” approach to international relations is still being felt in various industries, particularly the spirits sector. Despite hopes of a reprieve, uncertainties remain high for Kentucky whiskey producers who are heavily dependent on long-term planning. The looming threat of tariffs and trade conflicts continues to create challenges for U.S. distillers, with the potential for significant financial losses and market disruptions.
Judy Hollis Jones, president of Buzzard’s Roost in Louisville, expressed concerns about the lack of certainty in the industry, emphasizing the importance of stable planning for long-term success. The Kentucky Distillers’ Association has repeatedly warned about the detrimental effects of tariffs and retaliatory measures on the spirits industry, with recent trade conflicts mirroring past challenges faced by American distillers.
The European Union’s plans to reinstate tariffs on American whiskey could have severe consequences for U.S. distillers, threatening valuable export markets and revenue streams. Chris Swonger, CEO of the Distilled Spirits Council, highlighted the potential for “irreparable harm” to distillers of all sizes if the proposed tariffs are implemented.
While larger distillers may have resources to weather the storm, smaller producers are more vulnerable to market fluctuations and disruptions caused by tariffs. The uncertainty surrounding trade policies and the threat of a prolonged trade war have left many in the industry on edge, with fears of losing valuable sales and market share.
In the midst of these challenges, the spirits industry continues to navigate the complex landscape of international trade, balancing the need for profitability and sustainability in a highly competitive market.
There are a few alternative strategies to consider. One option is to focus more on selling domestically, while another option is to explore new markets overseas. However, planning for either of these options can be challenging. “Discussing this is starting to give me a headache,” remarked Yarbrough.
For Tom Bard, a craft distiller from Kentucky, the concern is that the hard-earned progress in Canada may be jeopardized by the ongoing trade conflict. Bard and his wife, Kim, are the owners of The Bard Distillery in Muhlenberg County, western Kentucky. Although their products have successfully entered markets in British Columbia and Alberta, a new order from north of the border is currently on hold due to the unpredictable nature of the trade war initiated by Trump.
Reports suggest that larger distilleries have the resources and market reach to navigate disruptions caused by tariffs. “That’s a blow for us,” Bard expressed. “For a small distillery like ours, where each shipment is significant, this setback is substantial.”
Bard highlighted the substantial investments made by his team to establish a presence in Canada, with hopes that it would contribute significantly to the overall sales this year. “We were eager to send more products to Canada,” Bard explained. “We recently expanded our distillery to meet the increasing global demand for our offerings. The frustrating part is that once we have the new equipment up and running, we might not be able to maximize its potential due to uncertainty regarding the future.”
In 2024, the EU was identified as the leading export market for U.S. distilled spirits, closely followed by Canada, according to the council. Bard emphasized the importance of resolving the dispute to enable Canadian distributors to resume accepting American spirit shipments.
To mitigate the impact of reduced sales in Canada, Bard intends to increase distribution within the domestic market. “As small-business owners, we are committed to finding solutions,” he stated. “However, it would be beneficial to overcome these obstacles.”
