Impact of US-Canada Trade Tensions on Alcohol Exports
So, it looks like there’s a notable shift happening with US liquor and wine exports to Canada, which have dropped more than 60% in the first half of this year. This seems largely tied to the trade war initiated by President Trump. By June, the value of whiskey, rum, gin, and other spirits shipped to Canada was around $43.4 million, according to the Distilled Spirits Council.
Meanwhile, wine exports are facing an even tougher situation, plummeting by approximately 67%, based on federal trade statistics highlighted by a US trade group. This decline was first reported by the Wall Street Journal.
The Canadian province, which oversees most alcohol imports and distribution, has taken American brands off the shelves, replacing them with local options after a 25% tariff on US imports was implemented. Of course, that didn’t sit well with many Canadians, especially as Trump had previously mused about making Canada the 51st state.
At a June tasting event hosted by the online magazine Whiskey Explorer, participants were only offered spirits from Canada, Ireland, or Scotland, actively avoiding brands from the US, like Jack Daniels. One attendee, Mike Bricebois, who promotes Canadian whisky, shared, “The general theme was that they were boycotting the US.”
The Ontario Liquor Commission, responsible for managing liquor retail in Canada’s most populous province, used to sell over $700 million in American spirits and wine, but these sales have seemingly vanished.
California’s wineries, in particular, have felt the brunt of this boycott. The wine lab representing these producers estimates that American wineries have lost over $173 million in export revenue in just six months, with Canada representing 35% of US wine exports last year. Robert Koch, from the Wine Institute, lamented the absence of US wine in Canadian stores, saying it disrupts longstanding trust built over decades and affects agriculture and rural jobs dependent on access to international markets.
Smaller companies are especially feeling the pressure. For instance, the Pasolo Bulls winery in California has seen sales drop around 10% this year, with executive VP Gretchen Roddick noting that their wines are stuck in a Canadian warehouse after being removed from store shelves. “It’s definitely going to hurt us personally,” she remarked.
Other smaller distilleries, like Baltimore’s Sagamore Spirit, which previously exported 10% of their rye whiskey to Canada, also face significant losses, with CEO Robert Cullins projecting a $2 million revenue drop this year. He expressed frustration over years spent seeking Canadian regulatory approval only to face a sudden market shutdown.
Interestingly, Canadian liquor retailers are filling the gap with domestic products like Maverick Distillery’s offerings. Reports indicate a 14% increase in local alcohol purchases in Ontario since the boycott started. Officials suggest that the province is standing up to Trump’s tariffs, pointing directly to economic impacts.
Despite the tariffs, some Canadian consumers are still purchasing American products. For example, Jasmeen Growal, owner of Calgary’s Platina Liquor, noted a 30% rise in US wine sales recently, with bourbon sales up by 7%. She mentioned that many customers are stockpiling well-known wines, fearing they may not be available again.
Overall, wholesale purchases of Alberta Spirit reportedly dropped 40% from April to June compared to last year, with American wine purchases decreasing by about 55.5%. The situation continues to evolve, and the Ontario Liquor Commission and the Alberta Games, Liquor and Cannabis Commission are under scrutiny amid these changes.
