The producer of Jose Cuervo Tequila expects an US$80 million impact on its business in 2025 from US tariffs.
During a conference call for Jose Cuervo maker Becle’s 2024 full-year financial results on 27 February, the company disclosed a forecast for the year ahead after US president Donald Trump confirmed he would move forward with a 25% tariff on Mexican and Canadian products on 4 March.
Chief financial officer Rodrigo de la Maza told analysts during the call: “We estimate the impact of these tariffs to be approximately US$80 million in 2025 assuming no mitigating actions through pricing, operational efficiencies or currency effect.”
He noted that the company was in a “favourable position” as, like many other producers, it had “proactively increased inventories in the US”.
For the fourth quarter (Q4) of 2024, Mexican spirits company Becle noted a 2% year-on-year decrease and a like-for-like sales drop of 10.5%, which is based on a fixed currency exchange rate.
The firm’s total sales for 2024 fell by 0.9% year on year and were down by 2.9% on a like-for-like basis.
For 2025, de la Maza said the company expects to deliver full-year net sales value growth in mid-single digits compared to 2024, however this excludes the impact of the forthcoming tariffs.
‘Industry-wide headwinds’
The company was hit particularly hard in its biggest market, the US and Canada, where Q4 sales fell by 14% (a decrease of 24.7% on a like-for-like basis).
Luis Fernando Félix Fernandez, managing director of US and Canada, said its fourth-quarter performance reflected a “combination of industry-wide headwinds and proactive commercial decisions”.
He told analysts: “To support distributor destocking efforts, we adopted a measure approach to shipments, ensuring better alignment with full-year depletions.”
Fernandez emphasised that the company remained a “pricing leader” during 2024 as the company “leveraged promotion selectively” to “ensure long-term brand equity” while competitors “took more aggressive measures”.
“From a competitive standpoint, our portfolio is outperforming key industry benchmarks,” he claimed, citing Nielsen data for the 13 weeks ending 4 January 2025, with the company growing dollar sales by 1.8% in full-strength spirits as the overall spirits category (excluding prepared cocktails) dipped by 0.3%.
“We’re also gaining share in the on-premise channel, where SipSource data shows we are outpaced industry trends by 2% in Q4,” Fernandez highlighted.
Speaking about the ready-to-drink (RTD) category, where Becle reported a 31.2% Q4 sales drop for the segment, Fernandez explained: “The RTD category continues to present challenges with category growth concentrating in small formats.”
The company, which mainly offers ready-to-serve products in the RTD sector, plans to “increase innovation efforts with RTDs in 2025 to stabilise declines”.
He added: “Looking ahead, we are taking proactive steps to manage the complexities of 2025. Our focus remains on strengthening our market position, optimising portfolio mix and executing our long-term commercial strategy.”
‘Challenging’ Mexican market
Sales in Mexico (which represent 25.2% of group sales) were down by 6.3% for the 2024 full year, but Q4 delivered growth of 2.8%.
Olga Limón Montaño, managing director of Mexico and Latin America, described the Mexican market as “challenging with macroeconomic pressures driving a contraction across the spirits industry”.
She continued: “Within the industry, the Tequila category outperformed the overall spirits industry, favouring Cuervo in this category. We strengthened our competitive position and expanded our market share throughout the year.
“Premium brands were a key driver of this success, leading to a 4% increase in price per case for the quarter and a 3% rise for the full year.”
She noted that retailers had adjusted inventories due to “softer demand” in the first three quarters of 2024, but Q4 shipments and depletions “were more closely aligned with the market contraction”, resulting in “healthier inventory levels” by the end of the year.
Montaño also noticed a “gradual return to typical seasonality patterns” in the second half of 2024. “We expect 2025 to reflect a similar seasonality structure supporting more normalised performance over the year,” she said.
In Latin America, she noted challenges such as inflation and political uncertainty, which are expected to persist in 2025.
Montaño concluded: “As we enter 2025, we remain cautiously optimistic for both Mexico and Latin regions, despite volatile market dynamics. The science of recovery and our strategic initiatives position us favourably to maintain our market leadership.”
Becle’s portfolio includes 1800 Tequila, Bushmills Irish whiskey and Kraken rum.
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Author: Nicola Carruthers
