U.S. President Donald Trump’s threat to impose 200% tariffs on alcohol from Europe would serve a major blow to drinks makers on the continent, but it could have one unlikely beneficiary — the struggling beer industry.
President Trump said Thursday that he may target wine, champagne and other alcoholic beverages from France and other European nations after the European Union moved to reinstate an import tax on American whiskey in response to earlier Trump tariffs.
Such a levy, if enacted, could “literally wipe out” all global profits for some European drinks producers, Trevor Stirling, managing director and European beverages analyst at Bernstein, said Friday.
“If you take it at face value, for some of the producers, it could literally wipe out all of their global profits,” Stirling told CNBC’s “Squawk Box Europe.”
French spirits maker Rémy Cointreau — which derives around one-third of its global sales from the U.S., would likely be among the worst affected — Stirling said, noting that markets were currently failing to fully price in the impact of the proposed tax.
Wine and spirits firms Pernod Ricard, Rémy Cointreau and Davide Campari all fell more than 3% Thursday, following Trump’s comments, with the latter two slipping again during Friday’s session. LVMH, which owns Moët & Chandon and Hennessy among others, briefly turned positive Friday before slipping back in the red following nine negative sessions.
