Booze brands are hopeful that help is on the way for their industry – and they need it. Tariffs and declining drinking habits have weighed heavily on beverage companies over the last two years, but changing control of Congress may signal near-term relief. 

The beverage market was apparently thirsty for some good news. Stocks of some beer, wine, and liquor brands perked up after election results rolled in. Companies like Diageo, the British beverage giant behind brands like Guinness and Smirnoff, and Brown-Forman, which makes spirits like Jack Daniels and Chambord, enjoyed a stock pop of more than 5% after Election Day. Anheuser-Busch, Molson Coors Beverage Company, Boston Beer Company, and Constellation Brands, which imports popular Mexican beer brands in the U.S., also experienced gains on Wednesday as the blue wave swept through.

Trump’s tariffs may have first turned international trade upside down last year, but their effects are still being felt. Last month, the U.S. charged ahead with a plan to ban almost $1 billion in imports from its Northern neighbor, restricting the flow of Canadian dairy products, motorcycles, and alcoholic products. The ban was designed to punish Canada for pushing back with its own tariffs on American goods, but a 50% tariff already limited imports across many of those categories. Still, the full ban shows that Trump’s erratic trade wars rage on, even as American consumers shoulder much of the economic pain for those policies.

Alcoholic beverages make up the vast majority of the estimated $967 million in Canadian imports the ban is expected to impact, yet another symbolic blow for an industry already reeling from a perfect storm of market forces.

Source link