Booze Stocks Jump 5% as Midterms Raise Hopes of Tariff Relief

Diageo and Brown-Forman stock climbed more than 5% the day after Election Day, as investors bet that a Democratic Congress will unwind the tariffs squeezing the beverage industry.

Anheuser-Busch, Molson Coors Beverage Company, Boston Beer Company, and Constellation Brands, which imports popular Mexican beer brands into the U.S., also posted gains on Wednesday as the blue wave swept through. The rally reflects a simple calculation: tariffs and declining drinking habits have weighed heavily on beer, wine, and liquor companies for the last two years, and changing control of Congress may signal near-term relief.

How bad is the trade damage?

Last month, the U.S. charged ahead with a plan to ban almost $1 billion in imports from Canada, restricting the flow of Canadian dairy products, motorcycles, and alcoholic products. Alcoholic beverages make up the vast majority of the estimated $967 million in Canadian imports the ban is expected to hit.

The ban was designed to punish Canada for pushing back with its own tariffs on American goods, though a 50% tariff already limited imports across many of those categories. It's the latest blow in Trump's erratic trade wars — and American consumers are shouldering much of the economic pain.

The industry has been here before. Last year, Canadian stores yanked U.S. booze from their shelves after Trump announced a 25% tariff on almost all imports from Mexico and Canada. The Distilled Spirits Council, a beverage industry trade association, warned of "great harm" to U.S. companies and their workers at the time, and expressed concern that Canada's retaliation would worsen the state-side situation.

Who's still drinking?

The trade fights amplify an already grim demand picture. Global alcohol consumption is plunging, both in the U.S. and worldwide.

In 2025, the share of American adults who said they drink alcohol dropped to 54%, according to polling from Gallup — one percentage point below the previous record low reported in 1958, and a dramatic dip from 2022, when 67% of Americans said they were drinkers.

High prices are accelerating the shift. In 2026, the price of beer, wine, and liquor soared alongside expensive chocolate and unaffordable beef, straining sales for booze-based businesses.

In a recent survey of 1,000 Americans who drink, market research platform Zappi found that 65% of adults say they "pre-game" by drinking at home before going out to save money on alcohol. What was once a cash-strapped college ritual has gone mainstream.

"Pre-gaming is no longer a niche or age-specific behavior — it's a mainstream occasion that brands need to design for deliberately," Zappi said in its report. "Retail brands, particularly [ready-to-drink products], spirits and hard seltzers should be thinking about the 'pre-game moment' as a distinct occasion."

What does a cocktail cost now?

The average price of a cocktail in the U.S. is now above $13 — and much more in cities like New York, where prices for everything run higher.

Ordering a martini set consumers back an average of $18.63 in the U.S. this year, up 8% from a year ago, according to data from marketing firm Technomic. A margarita saves you more than $8 compared to a martini, but margarita prices also crept up roughly 2% on average in 2026 — and as much as 33% in Alaska.

The new premium on drinking is reshaping product demand. Suntory Global Spirits CEO Greg Hughes told The Wall Street Journal that demand for its mini-bottles of staples like Maker's Mark and Jim Beam is surging as drinkers trim budgets and order fewer drinks out. "They're trying to stretch the dollar by pregaming," Hughes said. "You can see that's what's growing."

What changes under a Democratic Congress?

Tariff relief is at the top of the menu for Democrats as they take control of Congress next year. "We're paying a tremendous amount of money for this," incoming Michigan Senator Abdul El-Sayed said in a podcast interview last week. He described ending the trade war with Canada as something Democrats "absolutely have to do immediately" — a priority he shares with the beverage industry.

"Getting American distilled spirits back on the shelves in Canada and securing the U.S. removal of the import ban on Canadian spirits remain top priorities for our industry especially as we head into the crucial holiday season," Distilled Spirits Council of the U.S. President and CEO Chris Swonger told Fast Company. "A return to zero-for-zero tariffs on distilled spirits is a proven policy that has fostered economic growth for the hospitality industry, and we will continue to share that message with the administration and the new Congress."

Whether that message lands with a new Congress — and an administration that has shown no signs of backing off its trade wars — will decide if the post-election stock pop becomes a sustained recovery or a one-day hangover.