Beer and tequila enthusiasts may face price hikes if President-elect Donald Trump implements a proposed 25% tariff on goods from Canada and Mexico. This potential move could impact popular beverages like Modelo, the top-selling beer in the U.S., and tequila, which is exclusively produced in Mexico.
Industry Faces Potential Challenges
Small and large businesses alike could face increased costs. Constellation Brands, which imports Modelo, Corona, and Casa Noble tequila, might see a 16% rise in expenses, potentially leading to a 4.5% price increase for consumers, according to Wells Fargo equity analyst Chris Carey.
Business Owners Brace for Impact
Some companies are already taking action. Meximodo, a Mexican restaurant in New Jersey known for its extensive tequila collection, is stockpiling products to avoid significant price surges. Similarly, Le Malt Hospitality Group, which operates Meximodo, has tripled its tequila order ahead of a potential tariff.
The Broader Impact on Imports
In 2023, the U.S. imported $5.69 billion worth of beer and $4.81 billion of spirits from Mexico, representing a 126% increase since 2017. Tariffs on these imports could not only raise prices but also lead to retaliatory tariffs on American-made spirits, disrupting global trade relations.
Small Breweries Could Struggle
Independent craft breweries, which rely on Canadian malted barley and aluminum for cans, may also feel the pinch. Similar tariffs in 2018 on steel and aluminum drove up production costs for U.S. breweries, and history could repeat itself.
A Call for Preparedness
Industry leaders emphasize the need for preparation and negotiation. While these tariffs remain speculative, businesses are preparing for the worst-case scenario to minimize consumer impact.
