Brown–Forman

“Risks Related to Our Business and Operations Our business performance depends substantially on the continued health of the Jack Daniel’s family of brands. The Jack Daniel’s family of brands is the primary driver of our revenue, and Jack Daniel’s is an iconic global trademark with a loyal consumer fan base.”

Annual report unknown yearA · The company itself

“For example, we have observed an increase in diversification by various consumer goods companies such as the entrance of both traditional beer and soft drink companies into the ready-to-drink market and the entrance of both beer and spirits companies into the cannabis market – expanding the potential for competition in the spirits market from various sectors of the consumer goods industry.”

Annual report unknown yearA · The company itself

“Many global spirits brands, including some of our brands, experience problems with product counterfeiting and other forms of trademark infringement.”

Annual report unknown yearA · The company itself

“Product innovation, particularly for our core brands, is a significant element of our growth strategy; however, there can be no assurance that we will continue to develop and implement successful line extensions, packaging, formulation or flavor changes, or new products.”

Annual report unknown yearA · The company itself

“Our brand names, trademarks, and related intellectual property rights are critical assets, and our business depends on protecting them online and in the countries where we do business.”

Annual report unknown yearA · The company itself

“We primarily manufacture, distill, bottle, import, export, market, and sell a wide variety of beverage alcohol products under recognized brands.”

Annual report unknown yearA · The company itself

“Brands Beginning in 1870 with Old Forester Kentucky Straight Bourbon Whisky – our founding brand – and spanning the generations since, we have built a portfolio of more than 40 spirit and ready-to-drink (RTD) cocktail brands that includes some of the best-known and most loved trademarks in our industry. The most important and iconic brand in our portfolio is Jack Daniel’s Tennessee Whiskey, the #1 selling American whiskey in the world.1 Within the Jack Daniel’s portfolio, Jack Daniel’s 14-Year-Old Tennessee Whiskey took home honors for World’s Best Tennessee Whiskey and Jack Daniel’s Bonded won the award for Best Tennessee Whiskey (No Age Statement) at the 2026 World Whiskies Awards.”

Annual report unknown yearA · The company itself

“The Jack Daniel’s family of brands, led by Jack Daniel’s Tennessee Whiskey (JDTW), is our most valuable asset – the engine of our overall financial performance and the foundation of our leadership position in the American whiskey category.1 We continually strive to strengthen the brand’s leadership position, and will work steadfastly to keep JDTW relevant to consumers worldwide. We will also pursue opportunities to grow the Jack Daniel’s family of brands across markets, premium-and-above price points, channels, and consumer groups.”

Annual report unknown yearA · The company itself

“In addition to the leadership of our Jack Daniel’s family of brands, we expect strong worldwide growth from our other whiskey brands, particularly Woodford Reserve and Old Forester. Woodford Reserve is the leading super-premium American whiskey globally,1 growing volumes at a strong double-digit compound annual growth rate since the brand was introduced over 25 years ago.”

Annual report unknown yearA · The company itself

“Our tequila portfolio is led by two brands steeped in Mexican heritage, Herradura and el Jimador. We remain committed to the growth of our tequila business in the United States and the long-term growth prospects for the category globally.”

Annual report unknown yearA · The company itself

“We believe that our Scotch whiskies, The Glendronach, Benriach, and Glenglassaugh, and our Irish whiskey, Slane, are well positioned in their respective categories. We expect these brands to contribute meaningfully over the longer term.”

Annual report unknown yearA · The company itself

“We continue to invest in the global expansion of our established RTD brands, most notably New Mix, which has demonstrated sustained leadership in Mexico and is now being introduced to select markets in the United States. This expansion reflects our broader desire to leverage our tequila expertise and meet growing consumer demand for authentic, spirit-based cocktails.”

Annual report unknown yearA · The company itself

“As a result, consumers may begin to shift their consumption and purchases away from our premium and super-premium products, or away from alcoholic beverages entirely.”

Annual report unknown yearA · The company itself

“Consolidation, whether domestically or internationally, among spirits producers, distributors, wholesalers, suppliers, or retailers and the increased growth of the e-commerce environment across the consumer product goods market have created and could continue to create a more challenging competitive landscape for our products. Consolidation at any level could hinder the distribution and sale of our products as a result of reduced attention and resources allocated to our brands because our brands might represent a smaller portion of the new business portfolio.”

Annual report unknown yearA · The company itself

“Over the past several decades, the number of small, local distilleries in the United States has grown significantly. This growth is being driven by a trend of consumers showing increasing interest in locally produced, regionally sourced products. As more brands enter the market, increased competition could negatively affect demand for our premium and super-premium American whiskey brands, including Jack Daniel’s.”

Annual report unknown yearA · The company itself

“From time to time, we consider acquiring or investing in additional brands or businesses or undertaking other strategic transactions. We expect to continue to seek acquisition, investment, and other strategic opportunities that we believe will increase long-term stockholder value, but we may not successfully identify potential acquisition or investment opportunities, identify suitable counterparties willing to transact with us, or consummate the purchase of brands or businesses or other strategic transactions at acceptable prices and terms.”

Annual report unknown yearA · The company itself

“A majority of our voting stock is controlled by members of the Brown family, and, collectively, they have the ability to control the outcome of stockholder votes, including the election of all of our directors and the approval or rejection of any merger, change of control, or other significant corporate transactions. We believe that having a long-term-focused, committed, and engaged stockholder base can provide us with an advantage in a business with aged products and multi-generational brands.”

Annual report unknown yearA · The company itself

“Disruption of our distribution network or fluctuations in our product inventory levels at distributors, wholesalers, or retailers could negatively affect our results for a particular period. Moreover, other suppliers, as well as wholesalers and retailers of our brands, offer products that compete directly with ours for shelf space, promotional displays, and consumer purchases.”

Annual report unknown yearA · The company itself

“While we seek to take advantage of the efficiencies and opportunities that large retail customers can offer, they often seek lower pricing and increased purchase volume flexibility, offer competing private label products, and represent a large number of other competing products. If the buying power of these large retail customers continues to increase, it could negatively affect our financial results.”

Annual report unknown yearA · The company itself

“In the United States, which generally prohibits spirits manufacturers from selling their products directly to consumers, we sell our products either to distributors or to state governments (in states that directly control alcohol sales) that then sell to retail customers and consumers.”

Annual report unknown yearA · The company itself

“In fiscal 2025, we revised our 2030 Sustainability Strategy to account for our current organization and to align our efforts with industry best practices and the most current climate science. Our goals broaden our focus beyond business operations to include our supply chain, where the majority of our environmental footprint resides.”

Annual report unknown yearA · The company itself

“Recognizing the strong cash-generating capacity and capital efficiency of our business, we will continue to pursue top-tier stockholder return through stockholder-friendly capital allocation and socially and environmentally conscious investments to fuel long-term growth.”

Annual report unknown yearA · The company itself

“We are a branded consumer products company in a highly competitive market, and our success depends substantially on our continued ability to offer consumers appealing, high-quality products.”

Annual report unknown yearA · The company itself

“In Canada, we sell our products to provincial governments.”

Annual report unknown yearA · The company itself

“We are subject to risks from changes to the trade policies, tariffs, and import and export regulations of the United States and foreign governments. Changes in import and export policies, including trade restrictions, new or increased tariffs or quotas, embargoes, sanctions and countersanctions, safeguards, or customs restrictions by the United States and foreign governments, could require us to change the way we conduct business and negatively affect our business performance, financial condition, results of operations, and our relationships with customers, suppliers, and employees.”

Annual report unknown yearA · The company itself

“The United States has announced and/or implemented significant new tariffs on imported goods from a wide range of countries, which has prompted retaliatory tariffs by a number of countries and a cycle of retaliatory tariffs by both the United States and other countries. For example, in March 2025, several Canadian provinces removed all American beverage alcohol from store shelves, including Jack Daniel’s, in response to the United States announcing a 25% tariff on goods imported from Canada.”

Annual report unknown yearA · The company itself

“Additionally, newly announced tariffs, particularly in light of the U.S. Supreme Court’s decision invalidating the use of the International Emergency Economic Powers Act to authorize certain tariffs and the potential escalation of trade disputes, could pose a significant risk to our business, including an increase to the cost of our products and, to the extent we absorb the costs of tariffs and do not pass them through to our customers, higher cost of goods sold and lower gross profit and margins.”

Annual report unknown yearA · The company itself

“International or domestic geopolitical or other events, including the imposition of tariffs or quotas by governmental authorities on any raw materials that we use in the production of our products, could adversely affect the supply and cost of these raw materials to us.”

Annual report unknown yearA · The company itself

“Principal Raw Materials Distilled Spirits Liqueurs RTD Products Packaging Agave Flavorings Carbon dioxide Aluminum cans Barley Neutral spirits Flavorings Cartons Corn Sugar Malt Closures Malted barley Water Neutral spirits Glass bottles Molasses Whiskey Sugar Labels Rye Wine Tequila PET1 bottles Sugar Water Water Whiskey Wood 1Polyethylene terephthalate (PET) is a polymer used in non-glass containers.”

Annual report unknown yearA · The company itself

“Our ability to make and sell our products depends on the availability of the raw materials, product ingredients, finished products, oak barrels, glass and PET bottles, cans, bottle closures, packaging, and other materials used to produce and package them.”

Annual report unknown yearA · The company itself

“For instance, only a few glass producers make bottles on a scale sufficient for our requirements, and a single producer supplies most of our glass requirements. Inability of our primary glass provider to produce sufficient quantities to meet our needs would increase our cost to produce and constrain supply of some of our products.”

Annual report unknown yearA · The company itself

“Some of our largest brands, including Jack Daniel’s and our tequilas, are distilled at single locations. A catastrophic event causing physical damage, disruption, or failure at any one of our major distillation or bottling facilities could adversely affect our business.”

Annual report unknown yearA · The company itself

“For example, in addition to our American and Irish whiskeys, rums, and some tequilas, which are aged for various periods, our Scotch whisky brands require long-term maturation – an average of 12 years with limited releases of 30 years or more – making forecasts of demand for such products in future periods subject to significant uncertainty.”

Annual report unknown yearA · The company itself

“Our tequila supply also depends on the growth cycle of agave plants, which take approximately six to seven years to reach full maturity, requiring us to make forecasts of demand for our tequilas over a long-time horizon to determine in advance how much agave to plant or otherwise source.”

Annual report unknown yearA · The company itself

“Additionally, changes in global grain and commodity pricing and availability may impact the markets where we operate.”

Annual report unknown yearA · The company itself

“Ingredients and Other Supplies The principal raw materials used in manufacturing and packaging our distilled spirits, liqueurs, and RTD products are shown in the table below. Principal Raw Materials Distilled Spirits Liqueurs RTD Products Packaging Agave Flavorings Carbon dioxide Aluminum cans Barley Neutral spirits Flavorings Cartons Corn Sugar Malt Closures Malted barley Water Neutral spirits Glass bottles Molasses Whiskey Sugar Labels Rye Wine Tequila PET1 bottles Sugar Water Water Whiskey Wood 1Polyethylene terephthalate (PET) is a polymer used in non-glass containers.”

Annual report unknown yearA · The company itself

“None of these raw materials are currently in short supply, but shortages could occur in the future. From time to time, our agricultural ingredients (agave, barley, corn, malted barley, molasses, rye, sugar, and wood) could be adversely affected by weather and other forces out of our control that might constrain supply or reduce our inventory below desired levels for optimum production.”

Annual report unknown yearA · The company itself

“Higher costs or insufficient availability of suitable grain, agave, water, molasses, oak barrels, glass, closures, and other input materials, or higher associated labor costs or insufficient availability of labor, could adversely affect our financial results.”

Annual report unknown yearA · The company itself

“Our most significant commodities exposures include natural gas, wood, corn, malted barley, aluminum, agave, and rye.”

Annual report unknown yearA · The company itself

“Unfavorable economic conditions could also cause governments to increase taxes on beverage alcohol to attempt to raise revenue, reducing consumers’ willingness to make discretionary purchases of beverage alcohol products or pay for premium brands such as ours.”

Annual report unknown yearA · The company itself

“Specifically, governments could prohibit or impose or increase limitations on advertising and promotional activities, or times or locations where beverage alcohol may be sold or consumed, or adopt other measures that could limit our opportunities to reach consumers or sell our products. Some countries historically have banned all television, newspaper, magazine, and digital commerce/advertising for beverage alcohol products. Additional regulation of this nature could substantially reduce consumer awareness of our products in the affected markets and make introducing new products more challenging.”

Annual report unknown yearA · The company itself

“As governmental entities look for increased sources of revenue, they may increase taxes on beverage alcohol products. In fiscal 2026, we saw excise tax increases in several markets, including Canada, Czechia, France, Türkiye, and the United Kingdom.”

Annual report unknown yearA · The company itself

“International or domestic geopolitical or other events, including the imposition of tariffs or quotas by governmental authorities on any raw materials that we use in the production of our products, could adversely affect the supply and cost of these raw materials to us.”

Annual report unknown yearA · The company itself

“For example, armed conflicts in the Middle East have contributed to elevated freight rates and longer transit times compared to historical levels, and prolonged or escalating conflicts could result in additional supply chain disruption, including higher transportation costs (such as a result of increased fuel costs), shipping delays, or increased costs from using air freight instead of ocean freight to mitigate inventory delays.”

Annual report unknown yearA · The company itself

“In addition, we are subject to potential business disruption caused by military conflicts, including the ongoing conflict with Iran and/or Iranian-sponsored actors, other conflicts in the Middle East, and the ongoing conflict in Ukraine and the resulting sanctions imposed on Russia by the United States and other countries; potentially unstable governments or legal systems; social, racial, civil, or political upheaval or unrest; local labor policies and conditions, including labor strikes and work stoppages; possible expropriation, nationalization, or confiscation of assets; problems with repatriation of foreign earnings; economic or trade sanctions; closure of markets to imports; anti-American sentiment; terrorism, kidnapping, extortion, or other types of violence in or outside the United States; and health crises.”

Annual report unknown yearA · The company itself

“Water is an essential component of our products, so the quality and quantity of available water is critical to our ability to operate our business. If extended droughts become more common or severe, or if our water supply is interrupted for other reasons such as government intervention, high-quality water could become scarce in some key production regions for our products, which in turn could adversely affect our business and financial results.”

Annual report unknown yearA · The company itself

“Principal Raw Materials Distilled Spirits Liqueurs RTD Products Packaging Agave Flavorings Carbon dioxide Aluminum cans Barley Neutral spirits Flavorings Cartons Corn Sugar Malt Closures Malted barley Water Neutral spirits Glass bottles Molasses Whiskey Sugar Labels Rye Wine Tequila PET1 bottles Sugar Water Water Whiskey Wood 1Polyethylene terephthalate (PET) is a polymer used in non-glass containers.”

Annual report unknown yearA · The company itself

“Higher costs or insufficient availability of suitable grain, agave, water, molasses, oak barrels, glass, closures, and other input materials, or higher associated labor costs or insufficient availability of labor, could adversely affect our financial results.”

Annual report unknown yearA · The company itself

“None of these raw materials are currently in short supply, but shortages could occur in the future. From time to time, our agricultural ingredients (agave, barley, corn, malted barley, molasses, rye, sugar, and wood) could be adversely affected by weather and other forces out of our control that might constrain supply or reduce our inventory below desired levels for optimum production.”

Annual report unknown yearA · The company itself

“Likewise, we source our oak barrels, in which we age our American whiskey, from an external supplier.”

Annual report unknown yearA · The company itself

“Our most significant commodities exposures include natural gas, wood, corn, malted barley, aluminum, agave, and rye.”

Annual report unknown yearA · The company itself

“We recognize that climate change is a business issue with risks and opportunities. As such, we are committed to actions that will ensure the long-term health of the planet and our business.”

Annual report unknown yearA · The company itself

“Increasing average temperatures could also affect the maturation and yield of our aged inventory over time.”

Annual report unknown yearA · The company itself

“Consumer preferences and purchases may shift, often in unpredictable ways, as a result of a variety of factors, including health and wellness trends, consumer dietary preference changes, weight loss regimens and pharmaceuticals, including GLP-1 drugs; changes in economic conditions, demographic, and social trends; public health policies and initiatives; changes in government regulation of beverage alcohol products; concerns or regulations related to product safety; legalization of cannabis and its use on a more widespread basis in the markets where we operate; and changes in trends related to travel, leisure, dining, gifting, entertaining, and beverage consumption.”

Annual report unknown yearA · The company itself

“In particular, a significant deterioration in economic conditions, including economic slowdowns or recessions, increased unemployment levels, inflationary pressures, or disruptions to credit and capital markets could lead to decreased consumer confidence and consumer spending, thus reducing consumer demand for our products and sales of used barrels.”

Annual report unknown yearA · The company itself

“Other potential negative consequences to our business from unfavorable economic conditions include higher interest rates, an increase in the rate of inflation, deflation, exchange rate fluctuations, credit or capital market instability, or lower returns on pension assets or lower discount rates for pension obligations (possibly requiring higher contributions to our pension plans).”

Annual report unknown yearA · The company itself

“A downgrade or potential downgrade of our credit ratings could adversely impact our borrowing costs and access to credit and capital markets, which could negatively affect our financial condition.”

Annual report unknown yearA · The company itself

“Our success depends on the efforts and abilities of our senior management team, other key employees, and our high-quality employee base, as well as our ability to attract, motivate, reward, develop, and retain them.”

Annual report unknown yearA · The company itself

“Higher costs or insufficient availability of suitable grain, agave, water, molasses, oak barrels, glass, closures, and other input materials, or higher associated labor costs or insufficient availability of labor, could adversely affect our financial results.”

Annual report unknown yearA · The company itself

“Our freight costs and the timely delivery of our products could be adversely affected by a number of factors, including driver or equipment shortages, higher fuel costs, weather conditions, traffic congestion, ocean freight lane disruptions, shipment container availability, rail shutdowns, customs importation delays, and increased government regulation.”

Annual report unknown yearA · The company itself

“For example, armed conflicts in the Middle East have contributed to elevated freight rates and longer transit times compared to historical levels, and prolonged or escalating conflicts could result in additional supply chain disruption, including higher transportation costs (such as a result of increased fuel costs), shipping delays, or increased costs from using air freight instead of ocean freight to mitigate inventory delays.”

Annual report unknown yearA · The company itself

“In particular, a significant deterioration in economic conditions, including economic slowdowns or recessions, increased unemployment levels, inflationary pressures, or disruptions to credit and capital markets could lead to decreased consumer confidence and consumer spending, thus reducing consumer demand for our products and sales of used barrels.”

Annual report unknown yearA · The company itself

“For example, attention remains focused largely on public health concerns related to alcohol abuse, including drunk driving, underage drinking, and the negative health impacts of the abuse and misuse of beverage alcohol. While most people who drink alcoholic beverages do so in moderation, it is commonly known and well reported that excessive levels or inappropriate patterns of drinking can lead to increased risk of a range of health conditions and, for certain people, can result in alcohol dependence.”

Annual report unknown yearA · The company itself

“Our competitors may respond to industry and economic conditions and shifts in consumer behaviors more rapidly or effectively than we do. To remain competitive, we must be agile and efficient in adopting digital technologies and building analytical capabilities, which our competitors may be able to achieve with more agility and resources.”

Annual report unknown yearA · The company itself

“Similarly, when energy costs rise, our transportation, freight, and other operating costs, such as distilling and bottling expenses, also could increase.”

Annual report unknown yearA · The company itself

“Additionally, investor advocacy groups, institutional investors, other market participants, stockholders, employees, consumers, customers, influencers, and policymakers have focused increasingly on the environmental, social, and governance or “sustainability” positions and practices of companies. If our positions or practices do not meet investor or other stakeholder expectations and standards, which continue to evolve, our corporate reputation, stock price, ability to attract and retain high-quality talent, and the performance of our brands and business may be negatively affected.”

Annual report unknown yearA · The company itself

“At the global level, potential changes in tax rules or the interpretation of tax rules arising out of the Base Erosion and Profit Shifting project initiated by the Organization for Economic Co-operation and Development (OECD) include increased residual profit allocations to market jurisdictions and the implementation of a global minimum tax rate. In December 2021, the OECD issued Pillar Two model rules, which would establish a global per-country minimum tax of 15%, and the European Union has approved a directive requiring member states to incorporate similar provisions into their respective domestic laws.”

Annual report unknown yearA · The company itself

“Our freight costs and the timely delivery of our products could be adversely affected by a number of factors, including driver or equipment shortages, higher fuel costs, weather conditions, traffic congestion, ocean freight lane disruptions, shipment container availability, rail shutdowns, customs importation delays, and increased government regulation.”

Annual report unknown yearA · The company itself

“Consumer preferences and purchases may shift, often in unpredictable ways, as a result of a variety of factors, including health and wellness trends, consumer dietary preference changes, weight loss regimens and pharmaceuticals, including GLP-1 drugs; changes in economic conditions, demographic, and social trends; public health policies and initiatives; changes in government regulation of beverage alcohol products; concerns or regulations related to product safety; legalization of cannabis and its use on a more widespread basis in the markets where we operate; and changes in trends related to travel, leisure, dining, gifting, entertaining, and beverage consumption.”

Annual report unknown yearA · The company itself

“Our business, operations, cash flows, and financial results have previously been, and in the future could be, impacted by health epidemics, pandemics, and similar outbreaks.”

Annual report unknown yearA · The company itself

“Ingredients and Other Supplies The principal raw materials used in manufacturing and packaging our distilled spirits, liqueurs, and RTD products are shown in the table below. Principal Raw Materials Distilled Spirits Liqueurs RTD Products Packaging Agave Flavorings Carbon dioxide Aluminum cans Barley Neutral spirits Flavorings Cartons Corn Sugar Malt Closures Malted barley Water Neutral spirits Glass bottles Molasses Whiskey Sugar Labels Rye Wine Tequila PET1 bottles Sugar Water Water Whiskey Wood 1Polyethylene terephthalate (PET) is a polymer used in non-glass containers.”

Annual report unknown yearA · The company itself

“In May 2025, we launched our own distribution company in Italy.”

Annual report unknown yearA · The company itself

“Our products are sold in more than 170 countries; accordingly, we are subject to risks associated with doing business globally, including commercial, political, and financial risks.”

Annual report unknown yearA · The company itself

“Geography The United States remains our largest market, and growth in this market is important to our long-term success. We expect to foster this growth by focusing on the premium and super-premium-plus spirits categories, continuing product and packaging innovation, and building brands within growing consumer segments.”

Annual report unknown yearA · The company itself

“Our products are sold in more than 170 countries; accordingly, we are subject to risks associated with doing business globally, including commercial, political, and financial risks.”

Annual report unknown yearA · The company itself

“In addition, laws and regulations, including FTC enforcement, are rapidly evolving to govern social media platforms and communications.”

Annual report unknown yearA · The company itself

“Our most significant commodities exposures include natural gas, wood, corn, malted barley, aluminum, agave, and rye.”

Annual report unknown yearA · The company itself

“Our products are sold in more than 170 countries; accordingly, we are subject to risks associated with doing business globally, including commercial, political, and financial risks.”

Annual report unknown yearA · The company itself

“We also have agreements with other parties for contract production in Australia, Belgium, China, Ireland, Latvia, Mexico, the Netherlands, Spain, the United Kingdom, the United States, and Venezuela.”

Annual report unknown yearA · The company itself

“Other potential negative consequences to our business from unfavorable economic conditions include higher interest rates, an increase in the rate of inflation, deflation, exchange rate fluctuations, credit or capital market instability, or lower returns on pension assets or lower discount rates for pension obligations (possibly requiring higher contributions to our pension plans).”

Annual report unknown yearA · The company itself

“In particular, a significant deterioration in economic conditions, including economic slowdowns or recessions, increased unemployment levels, inflationary pressures, or disruptions to credit and capital markets could lead to decreased consumer confidence and consumer spending, thus reducing consumer demand for our products and sales of used barrels.”

Annual report unknown yearA · The company itself

“Other potential negative consequences to our business from unfavorable economic conditions include higher interest rates, an increase in the rate of inflation, deflation, exchange rate fluctuations, credit or capital market instability, or lower returns on pension assets or lower discount rates for pension obligations (possibly requiring higher contributions to our pension plans).”

Annual report unknown yearA · The company itself

“Our most significant commodities exposures include natural gas, wood, corn, malted barley, aluminum, agave, and rye.”

Annual report unknown yearA · The company itself