Suntory to sell local to curb Trump tariffs
Japanese drinks giant Suntory has said it will shift focus to the domestic market in response to new US tariffs.
Tokyo-based brewer and distiller Suntory has responded to US President Donald Trump’s tariffs on goods imported to the US by saying it will shift where it markets its spirits.
Nobuhiro Torii, Suntory’s new president and the great-grandson of its founder, announced the change on Thursday, Reuters has reported.
“We will produce and try to sell locally,” Torii said. “That’s the key strategy with the tariffs.”
Last week, the US hit Japan with a larger-than-anticipated 24% levy on Japanese goods imported into the States. This rate, while lower than the initial rate of 34% lumped on neighbouring China (which Trump has now added to with additional 50% duties on Chinese goods), is higher than that of the EU (20%) or UK (10%).
Japan, the world’s fourth largest economy, is a top exporter to the US and its biggest source of foreign investment.
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Tariffs are likely to deeply hurt the country’s export-reliant economy, and Trade Minister Yoji Muto said on Thursday that Japan is leaving all options open to respond to Trump’s new tariffs.
Suntory mainly produces its soft drinks — which include brands like Lucozade, Orangina and Oasis — in their destination markets, meaning sales in the US will be sheltered from the duty hikes. However, its portfolio of spirits, including Tequila and Japanese whisky, must be made in specific locations making them more vulnerable to excise duties.
Whispers of Tokyo-aimed tariffs over the past few months led to further stockpiling by Japanese companies, with both Suntory and electronics giant Sony banking inventory in the US as the threat of tariffs loomed.
Suntory shipped Tequila from its Mexican brands into the US in anticipation of the tariffs imposed on Mexico.
The firm also said it was considering shifting Scotch sales to Europe from the US, explaining that it was planning to double down on sales of American whisky in the US market to mitigate “more tariff war and tit-for-tat actions”.
But now that the tariffs have been imposed, Suntory’s re-concentration on domestic sales is a sharp shift away from its previous strategy, as it continues to struggle with dropping consumption figures at home.
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