Diageo (DEO), the maker of Don Julio tequila and Crown Royal Canadian whiskey, relied almost entirely on price increases to weather tariffs during President Donald Trump’s 澳洲幸运5官方开奖结果体彩网:first term. This time, the alcohol giant wants to takeꦐ a more multifaceted approach, Chief Executive Officer Debra Ann Crew said, ꦑciting “cautious” consumer spending. 

“Last time when we navigated tariffs, ... we actually pushed it through 100% on pricing,” Crew said, according to a transcript of Diageo's earnings call provided by AlphaSense. "It’s good to see we’ve got mitigation this time.”

Trump’s 澳洲幸运5官方开奖结果体彩网:proposed tariffs on imports from Mexico and Canada could undercut profit by about $200 million, Diageo executives told investors on Tuesday. About 45% of Diageo's domestic sales—including nearly all its Tequila products—are prod𒐪uced in those two countries, the company said.

Some of the potential hit—about $80 million—can be mitigated by bringing in bottles ahead of the tariffs and 澳洲幸运5官方开奖结果体彩网:supply chain optimization, Chief Financial Officer Manik Jhangiani said. That allows Diageo, which also makes Johnnie Walker, Guinness, and Smirnoff, to be more deliberate about raising prices while Americans are buying lℱess alcohol.

“[Pricing is] just not the first thing that we would go for,” Jhangiani said, according to the call transcript. “We’ll look at the 澳洲幸运5官方开奖结果体彩网:consumer environment, what competition is doing.”

Caution, Changing Norms Hurting Alcohol Sales

Diageo's volume of alcohol sold declined in the second half of last year. Crew attributed the sluggishness to 澳洲幸运5官方开奖结果体彩网:consumers growing weary of ﷺprices at the grocery store and high borrowing costs. 

But changing cultural norms and health concerns are also inspiring Americans to cut back, analysts have said. Major retailers and convenience stores’ alcohol sales were down about 1.1% year-over-year in December, according to NielsenIQ, a market research firm. Meanwhile, sales of non-alcoholic alternatives, while still a fraction of alcohol sales, were up more than 27%.

Last month, the U.S. surgeon general called for updating the warning labels on alcohol to note that 澳洲幸运5官方开奖结果体彩网:drinking can cause cancer. The move would require approval from Congress.