Constellation Brands CEO downplays concerns about higher tariffs

In a Friday interview with CNBC’s Jim Cramer, Constellation Brands CEO Bill Newlands brushed off concerns about the possibility of higher tariffs, which former President Donald Trump has pledged to implement if elected.

“First of all, assuming there was a Trump administration, we already had four years of a Trump administration, and our business was up double-digit during that window of time,” Newlands said. “Two, we have a fair amount of our inputs that come from the United States and then are made into beer in Mexico. I highly doubt any perspective on tariffs would really be around: How do you hurt the American farmer.”

Constellation Brands is known for a variety of popular beer brands imported from Mexico, including Modelo, Corona and Pacifico. It also has a wine and liquor business that includes SVEDKA vodka. Trump has threatened to impose blanket tariffs as high as 20% on imported goods from all countries. His previous administration increased tariffs on Chinese goods, igniting a years-long trade war with the country that disrupted global trade and cost Americans billions.

Newlands stressed that the way the company makes its Mexican beers will not change.

“These are authentic Mexican beers,” he said. “Guess what? You have to make them in Mexico.”

He also discussed his recent meeting with Mexico’s new President Claudia Sheinbaum, the country’s first-ever female leader, saying she is focused on “shared prosperity.” Newlands said the company has a good relationship with the Mexican government on federal and local levels, adding that Constellation Brands is set to open a new brewery in Veracruz.

Constellation Brands reported a mixed quarter Thursday, posting an earnings beat but a slight revenue miss. The company saw success with its beer brands, but the wine and spirits segment continued to weigh on business. Newlands said Constellation Brands is in the middle of improving wine and spirits and is beginning to see some results.

“We have readjusted a lot of our marketing spend, we’ve done more tactical spend against some of those critical brands like The Prisoner and Kim Crawford and, and Meiomi, and it’s starting to show some success,” he said. “We’ve seen those businesses start to turn.”

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Constellation Brands.