Sales of U.S. Spirits in Canada Tumble 66%
Sales of spirits from the United States have dropped in Canada amid ongoing trade tensions, but overall alcohol sales are down, too.
Spirits Canada and the Distilled Spirits Council of the United States — both groups represent manufacturers and marketers of distilled spirits — released a joint statement last week about the decline in sales, citing findings from an economic analysis by Spirits Canada.
On March 5, in protest of President Donald Trump’s imposition of a 25% American tariff on select Canadian imports and talk of annexation, several Canadian provinces announced that they would no longer carry U.S. spirits products on their store shelves. From that date through the end of April, spirits sales were down 66.3% compared to a year earlier.
In 2024, Canada was the second-largest market for U.S. spirits imports. According to Spirits Canada, that same year the U.S. imported CA$621 million worth of Canadian spirits, and Canada imported CA$221 million worth of U.S. spirits.
Some Background on Tariffs
Currently, U.S. tariffs are suspended on imports from Canada that comply with the U.S.-Canada-Mexico Agreement (USCMA). Canada-produced spirits are covered under the USCMA.
President Trump has indicated that imports from Canada could face a 35% tariff beginning Aug. 1.
The analysis also found during that time period:
- Canadian spirits sales declined 6.3%.
- Other imported spirits sales declined 8.2%.
- Total spirits sales declined 12.8%.
Canada in turn began imposing a 25% tariff on all U.S. beverage alcohol products on March 13. Most Canadian provinces have removed all U.S. alcohol products from retail stores. Alberta and Saskatchewan, however, have since returned U.S. spirits to their store shelves.
"The North American spirits sector is highly interconnected, and the immediate and continued removal of all U.S. spirits products from Canadian shelves is deeply problematic for spirits producers on both sides of the border," Cal Bricker, president and CEO of Spirits Canada, said in a news release. "The current disruption demonstrates the critical importance of maintaining open, reciprocal trade relationships that benefit consumers, businesses and government revenues in both nations."
In March, total spirits sales fell 20.6% year-over-year following the delisting of U.S. products. In April, Canadian spirits sales increased 3.6% — likely buoyed by "Buy Canadian" momentum — and sales of other imported spirits grew 3.7%. The gains did not compensate for the losses stemming from the U.S. product removal. Overall, the spirits category stayed down 3.3% year-over-year in April, declining by 13.9 million Canadian dollars, from CA$419.4 million to CA$405.5 million.
Ontario, Canada’s largest spirits market, took the greatest hit with sales dropping 80% since removing U.S. spirits province-wide. Total spirits sales fell 20%, including a 12.8% decline in Canadian products and a 14.1% drop in non-U.S. products.
