Canadian purchases of U.S. liquor dropped significantly

A new U.S. report shows that Canadians have bought significantly less liquor from south of the border.

The Distilled Spirits Council of the U.S. (DSC) says that transactions were down 85 per cent in the second quarter this year.

This translates to less than $10 million in sales volume.

The U.S. organization calls this tendency very troubling. It says a shift away from American products is having an adverse effect on its members.

The Wine Growers Association of BC (WGBC) says this is a natural progression amid the trade war.

“Of course, I feel bad for the distillers and the truckers and corn farmers and barrel workers and everybody else in the American industries, they had nothing to do with this dispute either, Jeff Guignard, the CEO of WGBC, said.

“This is their government.”

He says this is a way for Canadians to show that they are not happy with the trade war.

Canadians voting with their wallet

“We have been friends and neighbors since the founding of our two countries, but at the end of the day, this is where we are at, and you can see here in Canada and here in British Columbia that customers are voting with their wallets and they’re doing everything they can to support their domestic industries.”

Another reason for the decline is that many Canadian provinces continue to ban American spirits from their shelves – even though retaliatory tariffs on U.S. spirits were officially dropped on Sept. 1.

With large quantities from south the border missing, Guignard suggests that Canadians might be finding new domestic favorites that they will keep gravitating to, even when the ban has ended.

“People have found themselves trying a new Canadian distilled product or trying Canadian wines for the first time and really liking what they find,” he explained.

“I think what can happen here is you will have a long-term shift in consumer preferences as they start to fall in love with more and more Canadian products.”

While exports to Canada experienced the biggest drop among all U.S. spirits, other major markets have also purchased less.

The Japanese bought 23 per cent less, British consumers imported 29 per cent from the U.S., and liquor drinkers across Europe purchased 12 per cent less.

Together with Canada, these four markets represent 70 per cent of all American liquor exports, with the EU accounting for half.

“The spirits sector is highly interconnected and, as a result, tariffs on imported spirits have wide-reaching consequences on the industry as a whole,” said DSC CEO Chris Swonger.

He urges President Trump to remove tariffs for the spirits sector.