USA: Suntory aims to sell local to avoid US tariffs

Japanese drinks giant Suntory will try to produce and sell locally to dodge the U.S. tariff threat, says president Nobuhiro Torii, President, Suntory, Yahoo!Finance reported on April 3.

“The biggest challenge we may have is spirits business. But almost 70% of our business is either in Japan or in the United States. And we have a strong bourbon brand in the United States. We have very strong Japanese brands in Japan. So we will produce and try to sell locally. That's the key strategy with the tariffs.”

“We always have challenges of how to control the supply and how to build up our liquid (business). But for the time being, I believe the trend itself continues to grow, so of course we carefully watch the (consumer) trend but at the same time we have to create the demand, so we should focus on brand investment so that our brand condition stays healthy.”

Nobuhiro Torii, great-grandson of the company's founder, takes the reins at a raucous time, with new U.S. tariffs poised to affect everything from Toyota's sedans to Suntory's aged whiskies.

The company's soft drinks are mainly produced in their destination markets, but spirits such as tequila must be made in specific locations and are more vulnerable to excise duties, Torii said. That means making bourbon for the American market in the United States, and Japanese whisky for domestically for consumption at home.

U.S. President Donald Trump revealed on Wednesday a broad set of new tariffs on trading partners, including a larger-than-anticipated 24% levy on Japanese goods. Trade Minister Yoji Muto said on Thursday Japan is leaving all options open to respond to Trump's new tariffs.

The trade rift presents a dilemma for Japanese companies like Suntory, which has spent decades expanding its global footprint as a hedge against an aging, shrinking consumer market at home.

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