The Trump administration’s tariffs may significantly affect the US alcohol beverage industry, even the celebrity-owned brands.
In an interview with the Newsweek, Marten Lodewijks, president of International Wine and Spirits Record (IWSR) Americas, said, “I don’t see how tariffs wouldn’t impact celebrities. What we’ve seen over the last sort of like 12-18 months, there actually have not been a lot of celebrity-backed brands launched.”
The Rise of Celebrity Alcohol Brands
Celebrities increasingly launch alcohol brands, leveraging their fame for market entry. From Dwayne “The Rock” Johnson’s Teremana Tequila to Jon Bon Jovi’s Hampton Water Wine, these ventures capitalize on star power and consumer appeal. However, this trend faced headwinds from the Trump administration’s trade policies.
Trump’s Tariffs and Alcohol Imports
Tariffs, notably a 25 per cent levy on Mexican imports and duties on EU goods, can disrupt the established supply chains, affecting brands reliant on imports from these regions.
Industry’s Response:
Cris deRitis, deputy chief economist of Moody’s Analytics, told Newsweek, “In terms of shopper behaviour and price psychology, we expect a pull-forward in spending in the immediate term as consumers try to get ahead of the tariffs before they are fully implemented. If consumers develop a belief that tariffs will be removed or reduced, this could lead them to delay purchases which could further drag on spending and output and push up unemployment and the odds of recession.”
New tariffs might cost American families a significant amount each year. Mike Pence’s group, ‘Advancing American Freedom,’ estimates this cost at over $3,500 annually.
Brands Under Pressure
Dos Hombres: The mezcal brand from Aaron Paul and Bryan Cranston faces pricing pressures due to the Mexican import tariffs.
Teremana Tequila: Dwayne Johnson’s popular brand could see increased costs despite its strong demand.
818 Tequila: Kylie Jenner’s brand may face significant stockpiling expenses to avoid the impact of tariffs.
Casamigos Tequila: Under Diageo, Casamigos is expected to see considerable profit declines due to the tariffs.
Hampton Water Wine: Jon Bon Jovi’s wine brand faces potential price hikes due to tariffs on European goods.
Financial Impact and Market Trends
While specific sales data is limited, Diageo projected a significant profit decrease due to tariffs. The French wine and spirits industry anticipated a substantial sales decline in the US. 818 Tequila’s stockpiling efforts also indicate financial strain.
