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Brown-Forman, the company behind Jack Daniel's whiskey, has strongly criticized Canada's decision to remove American-made liquors from store shelves.

CEO Lawson Whiting called the move a "disproportionate" response to tariffs imposed by the Trump administration, stating, "That's worse than a tariff because it's literally taking your sales away."

The ban follows a 25% tariff that the US recently placed on Canadian imports. In retaliation, several Canadian provinces have pulled American spirits, wines, and beers from stores.

The Liquor Control Board of Ontario announced that US alcoholic beverages would remain off shelves until the government advises otherwise, urging consumers to support Canadian alternatives.

Despite the controversy, Canada makes up only 1% of Brown-Forman's total sales, meaning the company can endure the losses

According to USA Today, Whiting expressed concerns about Mexico, which also faces the new tariff and contributes 7% to Brown-Forman's sales. The company is closely monitoring how the Mexican market reacts.

The Distilled Spirits Council of the United States (DISCUS) also voiced its dissatisfaction. "American wines and spirits have benefitted from fair and reciprocal trade with Canada and Mexico," the organization stated.

"These US tariffs on Mexico and Canada will result in great harm to US companies and employees throughout the wine and spirits supply chain."

Jack Daniel's Maker Struggles as Whiskey Demand Drops and Tariffs Take a Toll

The tariff dispute adds to Brown-Forman's ongoing struggles. The company has faced declining demand for whiskey, leading to significant cost-cutting efforts, including laying off 700 employees and shutting down a Kentucky cooperage where whiskey barrels are produced, CNN said.

After a boom during the pandemic, whiskey sales have slowed, a trend that Brown-Forman first noticed in 2023.

Stock market reactions were mixed. Brown-Forman's stock initially dipped but later closed 10% higher, as investors had already factored in the tariff's effects.

Meanwhile, Canadian consumers have increasingly supported domestic brands, shifting away from US products. Some are boycotting American alcohol and making conscious choices to purchase locally produced items instead.

The move reflects broader trade tensions between the US and Canada, despite their historically strong economic ties.

Whiting acknowledged the uncertain market conditions, stating that while external challenges persist, he remains confident in the company's future. Brown-Forman reaffirmed its annual sales forecast, projecting growth of 2% to 4% for the next fiscal year.