From Shots to Stocks: Why Tequila Makers Are Hoarding Bottles
Even without tariffs, tequila producers are facing rising costs, supply chain disruptions, and market shifts—all driven by uncertainty.
Editorial Team (ET)May 6, 2025
Even without the official imposition of tariffs, the U.S.-Mexico trade tensions have already left a mark on the tequila industry. The mere threat of a 25 percent tariff sent shockwaves through producers, investors, and distributors, forcing them into defensive maneuvers that have cost millions of dollars.
As a result, tequila makers scrambled to push inventory into the U.S. before potential price hikes, leading to massive stockpiling. Industry leaders, including Diageo and Becle, adjusted their operations to mitigate risks, only to find that the instability itself has done damage—regardless of whether the tariffs ever materialize.
The Price of Panic Buying
Tequila is not just another imported spirit; it’s a legally protected product that can only be made in designated regions of Mexico. The unique nature of the industry made the threat of tariffs even more severe, forcing producers to ramp up production and accelerate exports.
Mike Novy, CEO of Calabasas Beverage Company, which produces Kendall Jenner’s 818 Tequila, revealed that his company spent up to $2 million to preemptively ship six months’ worth of product to the U.S. Storage costs alone are adding another 10 percent to their expenses. This financial strain, multiplied across the industry, has already reshaped tequila’s market dynamics.
Surging Storage Costs and Rising Prices
Stockpiling tequila didn’t come cheap. Some businesses paid as much as $20,000 per shipping container to store their excess supply. While these precautionary measures might seem logical in the short term, they are now threatening to distort the market.
Brian Rosen, founder of InvestBev, which backs emerging spirits brands, noted that these high storage costs might push producers to raise prices—exactly what the tariffs would have done in the first place. This means that even without a formal tariff, consumers could still end up paying more for their tequila.
The Ripple Effect on Businesses and Consumers
The tequila industry’s turbulence comes at a time when both producers and retailers are already under pressure from high interest rates and inflation. Companies that depend heavily on tequila sales, such as Diageo, have been forced to rethink their inventory strategies.
At the retail level, businesses have taken drastic measures. La Contenta Oeste, a Mexican restaurant in New York, has stockpiled 120 cases of tequila and 80 cases of mezcal—six times its normal inventory. While this cushions them from short-term price spikes, it could also lead to excess supply if tariffs don’t materialize.
Even consumers have reacted, filling their home bars with months’ worth of tequila in anticipation of price hikes. Richard Paige, a tequila enthusiast from Indianapolis, admitted to stockpiling his favorite bottles, a strategy that could create an artificial drop in demand later in the year.
A Shift in Global Tequila Markets
The uncertainty in the U.S. market is already influencing tequila producers to look beyond their largest customer base. Mexican tequila brands are actively exploring new markets to avoid overreliance on the U.S.
This shift could alter the dynamics of the industry, making the U.S. tequila market less dominant in the long run. If tariffs were to become a permanent fixture, the effect would only be magnified. As Novy put it, “It’s already happening.”
The Future of Tequila in a Volatile Trade Landscape
The tequila industry has weathered economic storms before, but this latest trade dispute underscores just how fragile supply chains can be. Even if tariffs never fully materialize, their impact has already been felt through higher costs, market shifts, and uncertain consumer behavior.
Producers and distributors are left grappling with an uncomfortable reality: the mere threat of tariffs can be as damaging as their enforcement. For now, the tequila industry remains in limbo—paying the price for policies that may never actually come to pass.
