U.S. Liquor Sales Plummet in Canada Amid Trade Tensions

Impact of Trade Tensions on U.S. Spirits Sales in Canada

The U.S. spirits industry has experienced a significant decline in sales in Canada due to the ongoing trade tensions between the two countries. Several provinces have removed American liquor from store shelves, prompting Canadians to shift their purchasing habits toward domestic products. This change has had a noticeable impact on the market, with sales of U.S. spirits dropping dramatically.

A joint report by Spirits Canada and the Distilled Spirits Council of the United States revealed that from March 5 to April 30, sales of U.S. spirits in Canada fell by 66.3% compared to the same period last year. The decision by multiple provinces to pull American alcohol off the shelves was a direct response to U.S. President Donald Trump's tariffs and his comments about potentially annexing Canada. This move has led to a broader economic disruption within the North American spirits sector.

While Canadian spirits sales also declined during this time, the drop was less severe at 6.3%. Other imported spirits saw an 8.2% decrease in sales. Overall, total spirits sales in Canada dropped by 12.3% during the same period. Cal Bricker, president and CEO of Spirits Canada, expressed concern over the situation, stating that the removal of U.S. spirits from Canadian shelves is problematic for producers on both sides of the border. He emphasized the importance of maintaining open and reciprocal trade relationships that benefit consumers, businesses, and government revenues.

American spirit manufacturers have criticized the decision by Canadian provinces to remove U.S. liquor from store shelves. Lawson Whiting, CEO of Brown Forman, which owns Jack Daniel’s, called the move “worse than a tariff.” He explained that the action effectively removes U.S. products from the market, directly impacting sales.

According to the reports, total spirits sales in Canada fell sharply by 20% year-over-year in March. While Canadian spirits sales increased by 3.6% in April and other imported spirits rose by 3.7%, these gains were not enough to offset the losses from the removal of U.S. products. Compared to last year, overall spirits sales remained down 3.3% in April, representing a loss of $13.9 million.

Chris Swonger, president and CEO of the Distilled Spirits Council, stated that U.S. liquor should be available on Canadian shelves again. He argued that the current actions are unnecessarily reducing provincial revenues and harming Canadian consumers and hospitality businesses.

As the trade war continues, Canadians show no signs of reducing their efforts to avoid U.S. goods and travel. A recent Ipsos poll conducted for Global News found that 72% of Canadians are avoiding U.S.-made products. Additionally, 77% of respondents reported having a lower opinion of the U.S. as a country due to Trump's attacks on Canada's economy and sovereignty.

Trump's ambassador to Canada, Pete Hoekstra, made controversial remarks about Canadian attitudes toward the U.S., suggesting that Canadians are "mean and nasty" for refusing to travel to the U.S. and pulling American alcohol from shelves. However, the U.S. Embassy in Canada responded to these comments, noting that the decision by some Canadian provinces to ban U.S. alcohol does not contribute to a positive relationship between the two countries. They also emphasized that the U.S. government views the provincial bans as counterproductive to resolving broader issues.

In response to Hoekstra's comments, British Columbia Premier David Eby urged residents to continue supporting local businesses and traveling within Canada. This reflects the growing sentiment among Canadians to prioritize domestic products and services amid the ongoing trade disputes.