Canada was once the number-one buyer of U.S. wines. Since the trade war, that’s changed

Karl Storchmann, executive director of American Association of Wine Economists, joins BNN Bloomberg to discuss the demand outlook for wine as U.S. imports plunge in Canada.

Alcohol sales are down this year in Canada amid persisting economic uncertainty and a collapse in imports of beer, wine and spirits from the U.S.

As U.S. President Donald Trump’s global trade war marches on, provincial boycotts of American alcohol have begun to reflect in sales figures -- all amid a third financial crisis in five years for Canadian consumers.

The available data show declining sales for alcohol of all kinds this year, compared to the same time in 2024 — down more than $100 million across six provinces in the last quarter alone.

“The consumer is just feeling very fragile,” said CJ Hélie, president of Beer Canada, a trade association for beer makers, in a Thursday interview. “People are just pulling back on discretionary spending, and we’re seeing that big-time. Real softness in the market.”

With provincial retailers halting American alcohol purchases and pulling bottles from shelves earlier this year, Statistics Canada (StatCan) data show that in April, roughly $3 million in U.S. wine entered the country, down 94 per cent from $54 million for the same month in 2024.

“We are deeply concerned that U.S. tariffs on imported spirits from Canada and Mexico will significantly harm all three countries and lead to a cycle of retaliatory tariffs that negatively impacts our shared industry,” reads a joint statement from North American spirits industry groups on the eve of the trade war in February.

“Our industries have thrived due to the level playing field established across our borders.”

While U.S. beer imports have seen a less pronounced decline, they also make up a fairly small portion of the Canadian market.

“In some cases for generations, some of these iconic American brands have been made in Canada,” Hélie told CTVNews.ca. “Your Bud Lights, your Michelobs, your Pabsts … they’re made in Canada, almost all from Canadian grains, in our plants.”

Beer Canada noted in a February release that of all the beer consumed nationwide last year, 88 per cent was made in Canadian breweries.

Hélie says that for beer, the trade war’s impacts have been most pronounced in the manufacturing process, where aluminum tariffs threaten to make it far more expensive to produce the billions of cans filled at plants each year.

“[Brewers] saw this coming; they stockpiled as much as they could,” he said. “We haven’t seen that price spike yet, into the price of beer into the marketplace. But if you’re thinking Labour Day, this isn’t resolved … it’s going to be catastrophic for lots of brewers.”

Meanwhile, Canada has historically been the world’s number-one buyer of American wines, accounting for roughly a third of the U.S. export market last year. But for the month of April 2025, data compiled by the American Association of Wine Economists shows that figure fell to just four per cent, following the steepest decrease in purchases among America’s top 15 buyers.

On the other end of the transaction, American wines accounted for one in every five bottles (20 per cent) purchased at Liquor Control Board of Ontario (LCBO) stores in early 2024, but by the same time this year, that proportion had dropped to 15 per cent, losing the U.S. its top spot for import sales.

“Wine firms here in the U.S. thought that a tariff on (imported) goods, including wine from Canada, would be a boon, but it has turned out the other way around,” said Karl Storchmann, executive director of the American Association of Wine Economists, in an interview with BNN Bloomberg last week.

“Canada pulled the plug.”

Sales down across Canada

Early numbers show declining alcohol sales across provincial retailers.

Shortfalls in the opening months of 2025 range from roughly a tenth of a percentage point in New Brunswick, to eight per cent in Newfoundland and Labrador.

In Quebec, the liquor control board attributed a recent trend toward lower sales including a $90-million drop last fiscal year at government and specialized network stores to “changes in customers’ shopping habits.”

The latest numbers come from the fourth quarter of fiscal 2024-25, which varies by province, but generally ran from January to March, this year.

Of the six provinces with available data, Nova Scotia was the only jurisdiction showing increasing sales, though the province’s board notes that the total volume sold is still down nearly two per cent between last year and the year before that.

Since March, the province says it has held roughly $14 million in U.S. products in storage, rather than selling it, and that sales for products made in Nova Scotia have grown nearly 14 per cent in that time.

The Yukon Liquor Corporation told CTV News that U.S. imports made up 3.6 per cent of net sales in the territory between January and May of this year, down from 5.4 per cent for all of 2024.

And in British Columbia, where Premier David Eby described his March order to pull U.S. products as a response to "escalating threats from south of the border," wholesale net sales of American alcohol are down three per cent for whisky, 23 per cent for wine and nearly 60 per cent for beer.

Meanwhile, according to an emailed statement from the province’s Liquor Distribution Branch, this April and May have seen “increased customer interest and demand for products made in Canada.”

While U.S. alcohol remains available under some circumstances, and imports have resumed in parts of the country, a 25 per cent tariff remains in effect on wine, spirits and beer crossing into Canada.

The trade war isn’t the only factor in decreasing alcohol sales. StatCan notes that, on a per-litre basis, they’ve been on the decline for years, even before Trump’s return to the White House.

Between the 2019-20 and 2023-24 fiscal years, alcohol sales revenue only grew by around two per cent annually, on average, even as prices per-bottle have risen, the agency notes.

By volume, sales fell 3.8 per cent last year, in what a March release from StatCan called a "historic" drop.

“This was the largest volume decline ever recorded since Statistics Canada began tracking alcohol sales in 1949,” it read.

To Hélie, recent declines are a sign that consumers have been reacting to years of economic challenges, from a massive drop in out-of-home dining amid COVID-19 restrictions, to the inflationary spike that followed as customers returned to restaurant tables — what he calls “menu shock.”

“I’m going to go (from) $80 to $95 (for a night out), but that $95 meant I also had to cut out either the dessert, or the coffee, or the extra beer,” he said.

“We’ve seen that in the numbers, for sure.”

With files from BNN Bloomberg’s Jordan Fleguel