Emperador Inc., the liquor unit of tycoon Andrew Tan, expects a better year for its brandy business, but its whisky business faces challenges, especially with the new US trade policies.

In a disclosure to the Philippine Stock Exchange, the firm said “2025 will be better than 2024” for its brandy business as it expects higher margins this year by pivoting to target the low-priced segment.

However, while it intends to intensify competition in the lower-priced segment, Emperador said it will still continue to pursue its premiumization strategy.

The company produces premium products under the Fundador brand and lower-priced brandy products under the Emperador brand, although it has already introduced lower-priced Fundador brandy products.

However, Emperador is more wary of its whisky business under Whyte & Mackay, which owns various brands, including the high-end Dalmore brand, due to shifting US trade policies under President Donald Trump.

Thus, the firm said it is “keeping a close eye on developments on US tariffs and its effects on global market dynamics.” Aside from whisky, Emperador also produces brandy from its vineyards in Europe and has recently acquired premium mescal brands produced in Mexico.

For 2024, Emperador reported a 27.4 percent drop in net profit to ₱6.32 billion due to lower revenues coupled with continued investment in the business.

Revenues dipped 6.1 percent to ₱61.65 billion due to a weakness in consumer demand, given economic challenges leading to tighter wallets. Brandy revenue was lower by nine percent at ₱36.4 billion, while whisky revenue dipped 1.6 percent to ₱25.3 billion.

Brandy revenue declined on weak demand as consumers traded to bottom-shelf products, while profit fell 51.2 percent to ₱1.81 billion due to the cost of goods, the weakness of the Philippine peso, and higher expenses.

Revenue in the whisky category was more resilient last year, although net income decreased by 9.6 percent to ₱4.51 billion, mostly due to the product mix and interest rates and taxes.

Gross profit declined 11.2 percent to ₱18.78 billion as a result of the cost of raw materials, dry goods, and product mix, while earnings before interest, taxes, depreciation, and amortization dropped 17.2 percent to ₱11.39 billion as investments in the brands continued.