Diageo PLC (LSE:DGE) was among companies facing pressure on Monday after US President Donald Trump firmed up tariffs on Canadian and Mexican imports over the weekend.
Diageo, which owns drinks brands such as Crown Royal, Don Julio and Casamigos, dropped 3% to 2,345.5p on Monday.
According to Jefferies analysts, 46.2% of Diageo’s sales in the US were made up of imports from Mexico and Canada.
Trump on Saturday said 25% levies would be placed on goods from Canada and Mexico from Tuesday under efforts to stem the flow of drugs such as fentanyl into the US.
Chinese goods were to be slapped with 10% tariffs in the meantime, as Trump also warned of taxes against the European Union.
Diageo, which also reports interim figures on Tuesday, will likely have to hike US prices by 4.6% to accommodate the taxes, Jefferies added, before potential changes were Europe hit with tariffs.
These would also hit Pernod, Campari and Remy, Jefferies said, as tariffs so far threatened AB InBev and Heineken too.
"We would expect some stockpiling of spirits products ahead of the tariff announcement to delay the impact of the tariff pass-through."