#6 - Brown-Foreman (NYSE:BF)
Brown-Foreman (NYSE: BF)– The question for investors who are looking at the effect of the tariffs on the distiller of Jack Daniels whiskey is this: will raising prices by 10 percent (brought on by the European Union’s imposition of a 25 percent tariff) change consumption habits? Psychology would seem to argue against it. Consumers will attend to their vices even when faced with higher prices. And, the 10 percent increase may not be perceived as that much of a hike. Still, the EU carefully selected the products on which they would impose a tariff. The Jack Daniels brand is the best-selling whiskey by Brown-Foreman and the second highest selling whiskey in the world. Add to that the fact that 27 percent of sales come from Europe and you can see that this has the potential to put this stock on the rocks. However, Brown-Foreman also produces Woodford Reserve, a super-premium brand of bourbon that is also subject to the tariff. It has shown strong growth (22 percent in underlying net sales for 2018) that may help to trim any deterioration with the Jack Daniels brand.
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