The Democratic Party's “blue wave” mitigates the risks of immigration and tariff policies, and alcohol stocks strengthen collectively

The Zhitong Finance App learned that the “blue wave” set off by the Democratic Party in the midterm elections encouraged investors to bet that alcohol companies would be one of the beneficiaries. The market believes that the new Congress will take a tougher stand against the Trump administration's immigration and trade policies, and these policies have had an impact on alcohol companies before.

The stock price of Constellation Brand (STZ.US), which sells Modelo and Corona beer brands in the US, rose 7.4% on Wednesday, the biggest increase since April. Other alcohol stocks also rose one after another. Boston Beer (SAM.US) rose nearly 6%, Baifumen-A (BF.A.US) rose more than 5%, and Moku Liquor (TAP.US) rose more than 3%.

Possible changes in immigration enforcement policies, and possible adjustment of tariff policies in important alcohol markets such as Canada, have brought rare favorable factors to this industry, which is facing a decline in alcohol consumption in the US.

Bank of America analyst Peter Galbo raised the investment rating for constellation brands due to improved immigration conditions. “We now believe that the Democratic Party's control of Congress has reduced the risk of further tightening of the immigration environment,” he wrote in a report. However, the tightening of immigration policies has always been an important negative factor facing the company's beer business.

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Peter Galbo notes that Hispanic consumers account for approximately 40% of the American beer business of constellation brands. The tightening of immigration policies has led to a reduction in the size of this consumer group by strengthening border controls and reducing social gatherings. Earlier this year, the Constellation brand told analysts that communities with a high Hispanic population are still facing challenges, but recently this pressure has eased somewhat.

The rise in Baifumen's stock price reflects the market's belief that the tense relationship between the US and Canada may ease somewhat. As a producer of the Jack Daniel's whiskey and Woodford Reserve bourbon brands, the company has largely been excluded from this critical market. Earlier, in response to Trump's tariffs on Canadian products, various Canadian provinces took measures to exclude American alcohol brands from the local market.

According to data from the American Distillers Association, an industry trade organization, since 2025, US spirits sales to Canada have dropped 70%, from 232 million US dollars to 72 million US dollars due to the fact that US alcohol products have basically been removed from the shelves of Canadian alcohol stores.

TD Cowen analyst Seamus Cassidy said that although Canadian whiskey sales do not account for a large share of the overall business of Baifuman, if the trade tension between the US and Canada is reversed, it will bring considerable benefits to the company. Seamus Cassidy said on Wednesday that this “will largely offset” part of the impact of the company's weak sales, and the company's business is currently in a state of decline or weak growth. For Centreman, export sales are becoming increasingly important to overall results, as the growth rate of its domestic US business has slowed — about 3% of the company's sales come from the Canadian market.

However, according to a recent Gallup poll, despite a slight increase in the average number of drinks consumed by American drinkers this year, the percentage of Americans who say they drink alcohol themselves remains at an all-time low. Alcohol consumption spending also fell to a record low last year due to economic pressure and growing consumer demand for alternative products such as THC drinks.