The future looks uncertain for liquor producers if a potential trade war on alcohol unfolds. President Trump's threat of a 200% tariff on European wine, champagne, and spirits in response to the European Union's 50% tariff on American whiskey has triggered concerns. Brown-Forman and Diageo could face significant losses in such a scenario.

Brown-Forman, the company behind Jack Daniels and Woodford Reserve whiskey, is at risk of losing $0.36 per share if the EU's whiskey tariffs are imposed. The company derives about 20% of its sales from the EU and UK, indicating a potential impact on earnings per share. Similarly, Diageo, known for Johnny Walker scotch, could face a $0.28 per share hit with a 200% tariff on European alcohol.

Apart from tariffs, both companies also face challenges due to their exposure to Canada and Mexico. Brown-Forman's 7% sales from Mexico and 1% from Canada are at risk from potential tariffs. Diageo's significant sales from Canada and Mexico (45%) could also impact its earnings per share.

Analysts highlight that besides tariffs, other factors could further weigh on the companies, emphasizing the need for strategic planning to mitigate potential losses.