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Brown-Forman's incoming CEO has said the company's in-house distribution in the EU should give it "flexibility and control" if Europe invokes retaliatory taxes on American whiskey.

Lawson Whiting will replace Brown-Forman CEO Paul Varga on 1 January

Lawson Whiting will replace Brown-Forman CEO Paul Varga on 1 January

Lawson Whiting, who replaces Paul Varga at Brown-Forman next year, made the comments amid fears that US trading partners including Mexico and Europe may counter steel and aluminium tariffs with their own duties. American whiskey is included on an EU list of US exports that could face additional levies.

Speaking to analysts yesterday, Whiting said Brown-Forman is watching the situation closely but that any reaction would be market-by-market.

"It's very dangerous to make generalised statements across large economies and markets," Whiting said. "Markets in which we own our own route-to-market, which would be most of Europe, we have a lot more flexibility and control over the situation. In markets where we use third-party distributors this is a little bit more difficult."

Whiting added that it "seems like every day, we wake up and thing takes a little bit of twist and turn" with the taxes. But he said the company has survived sudden price pressures in the past from issues such as currency fluctuations and supply shortages. "We've experienced it before and we think we'll fight through it again," Whiting continued.

The CEO-elect was speaking after Brown-Forman's full-year results release, in which the company's sales increased by mid-single digits. It was the first results call with analysts since he was named as Varga's successor, and Whiting's appointment was praised by Brown-Forman chairman of the board Garvin Brown.

Brown also thanked Varga, whom the chairman of the board described as "the most successful CEO in our industry's modern-era period".

"When Paul entered the leadership ranks of Brown-Forman, the future of American whiskey was in doubt even in the United States," Brown said. "He will retire having successfully grown the Jack Daniel's franchise into the most valuable spirits trademark in the world according to the inter-brand survey of 2017."

Brown-Forman Performance Trends 2013-2017 - results data


Sectors: Legislation, Spirits

Companies: Brown-Forman

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