Brown-Forman CEO says US whiskey demise is “exaggerated” as family feud simmers

USA | Lawson Whiting, the retiring CEO of drinks group Brown-Forman (Jack Daniel’s), played down the demise of the American whiskey category, stating (2 September) that “interest is very high”, even though demand in developed markets, including Germany, France and the UK, is likely to remain under pressure this year. Renewed trade tensions with Canada pose an additional challenge. 

For its first quarter of fiscal 2027, ended 31 July 2026, Brown-Forman reported net sales decreasing 1 percent to USD 911 million compared to the same prior-year period, with operating income decreasing 3 percent to USD 252 million. The firm anticipates organic net sales to be approximately flat in fiscal 2027, whilst organic operating income is expected to decline in the 3 percent to 5 percent range.

Brothers criticise board

The outlook cannot please the members of the Brown family that still control the firm. According to the Wall Street Journal and Bloomberg, two outsider heirs sent a letter to the main family faction, accusing the board of “rewarding failure, and doing so lavishly and publicly”.

The letter (dated 10 July) to the Wolf Pen Branch, a separate company that controls about 60 percent of the family-owned voting shares in Brown-Forman, was signed by W.L. Lyons Brown III and his brother Stuart R. Brown. According to the reports it was critical of current management, especially CEO Lawson Whiting, 58, who announced his retirement three days later. However, his retirement will only be effective “upon the appointment of a successor”, the firm said.

Both brothers were previously involved in the company, but neither is active in Brown-Forman’s operations now.

The letter called out both the company’s falling stock price amid slumping sales, the failure to reach a merger deal earlier this year with French spirits company Pernod Ricard, and the board’s refusal to even consider a USD 15 billion offer from Kentucky bourbon maker Sazerac.

Falling stock wipes out billions of wealth

“The numbers are stark and undeniable,” they wrote, according to The Wall Street Journal. “Brown-Forman’s stock price has fallen from the mid-USD 70s per share to the mid-USD 20s per share over the past three years, eliminating billions of dollars of generational wealth for the Brown family and all other shareholders.” Indeed, Brown-Forman had a market capitalisation of over USD 30 billion in April 2023. Today it is about USD 12 billion.
A Brown-Forman spokesperson said the company “takes feedback from all stakeholders seriously, and we regularly engage in constructive dialogue.”

In 2025, Brown-Forman laid off 12 percent of its global workforce (roughly 650 jobs out of 5,400), closing and then selling its historic cooperage in Louisville, Kentucky. It idled its Scottish Glenglassaugh distillery and shifted production to its Benriach distillery. In May this year, it also paused production at its famous Slane Irish whiskey distillery in Ireland amid the same market pressures.

Why no deal?

The brothers further wanted to know why Brown-Forman’s board, currently headed by Marshall Farrer, would not consider Sazerac’s offer. “Sazerac is an American company headquartered in Louisville, Kentucky - a natural cultural and operational fit. If the Pernod Ricard transaction was Plan A, what is Plan B? The Company is in crisis. No one in Wolf Pen leadership, Board leadership, or management leadership is providing shareholders with any comfort on why the Company is an investment worth holding.”

Brown-Forman had announced in April, along with Pernod Ricard, that their attempt to reach a merger had failed to reach “mutually agreeable terms”. Sazerac, which had publicly announced a USD 15 billion takeover offer, renewed its bid in July. But Mr Farrer told the family that the offer “was not actionable” and dismissed it. 

“The board has a fiduciary duty to evaluate all credible offers for the benefit of shareholders, and that duty requires more from the board,” the brothers wrote, according to Bloomberg.