U.S. liquor consumption plummets, Canadian products not seeing proportional boost: Spirits Canada

Allison Bamford takes a closer look at how Sask.’s inconsistent liquor bans over retaliatory U.S. tariffs has caused instability for some local breweries.

As U.S. liquor consumption plummets in Canada due to trade uncertainty, local distilleries were hoping to pick up a larger piece of the market share.

But some say that hasn’t materialized.

Saskatoon’s Stumbletown Distilling went as far as developing new products when American-produced liquor was banned from Saskatchewan shelves in March.

“We thought we would be taking over all of that market and there’d be a lot less competition,” Stumbletown founder Craig Holland said.

It took three months for the distillery to create three products that would fill the demand for the U.S. liqueur Sour Puss. But the Saskatchewan government reversed its ban on U.S. liquor in June to give consumers more options – the same week Stumbletown planned to launch its Sour Rocket liqueur.

“It would have been nice to see the provinces a little more unified in all of those decisions,” Holland said.

Saskatchewan and Alberta are the only provinces that have lifted bans on American liquor imports.

Stumbletown still sells its Sour Rocket, but had it been the only product of its kind on shelves, Holland says that would have been a game changer.

“For a small company like us that tried to identify those gaps in the market early and come up with a solution, it would have made a fairly large impact on our business,” he said.

U.S. liquor consumption plunges

American spirit exports to Canada declined 85 per cent during the second quarter of 2025, according to a recent report from Distilled Spirits Council of the United States.

The drop is attributed to provincial bans on American liquor products and the retaliatory tariffs placed on U.S. spirits.

“While Canada eliminated its federal retaliatory tariff on spirits on Sept. 1, 2025, the majority of provinces continue to maintain shelf bans on U.S. products, creating a persistent barrier to normalized trade,” Via Dulay, director of communications for Spirits Canada, said in an emailed statement. “This disruption has had significant economic impacts on both sides of the border.”

Declining U.S. liquor consumption has not resulted in a proportional increase in Canadian spirits sales, Dulay said.

Earlier this spring, total spirit sales in Canada were down nearly 13 per cent, according to Spirits Canada data.

Sherry Halvorson, director of operations at Urban Cellars, a privately owned liquor store in Saskatoon, says overall sales in her shops continue to be down.

Since the onset of U.S. tariffs, Halvorson moved Canadian wines to the front of the store and placed American wines at the back. They’ve also made a designated section for local spirits.

“It’s up to the consumer what they wish to purchase. But right now, nobody’s buying the American products,” she said.

American liquor sales are down 50 per cent year-over-year at Halvorson’s stores, while Canadian product sales are up 35 per cent. Canadian wine sales have also increased about 25 per cent.

“Maybe it took the tariffs for Canadians to realize you have to support what’s at home versus going across the border,” Halvorson said. “It’s time for us to reflect on the fact that we have a lot of great products in Canada.”

Andreas Schotter, an international business professor at Western University’s Ivey Business School, believes consumers are strongly holding onto the “Buy Canadian” sentiment and much more cognizant of what they purchase.

“They are voting with their wallets,” he said.

Over time, Canadians may resort back to buying their favourite American bourbon, Schotter said, but he believes this is a trend that will last for the next few years.

“I think we will see, for a sustained time, a drop in U.S. liquor consumption in Canada, and even beer consumption,” he said.