Distilleries NAICS 312140

Aug 29, 2025 - Canada To Lift Tariff on American Spirits

• To reset its trading relationship with the US, Canada said it will remove its 25% tariff on about half of the US goods it has targeted effective September 1, The Wall Street Journal reports. Items getting tariff relief include wine, spirits, and beer. Reacting to the news, Distilled Spirits Council President and CEO Chris Swonger said "This is a very positive sign, but until all provinces put American spirits back on their shelves it won’t have much of an impact.” To date, only two provinces – Alberta and Saskatchewan – have put US spirits back on shelves. Canada, the second-largest market for US spirits exports in 2024, began imposing a 25% tariff on all US beverage alcohol products on March 13, and most Canadian provinces have removed all US alcohol products from retail stores.
• New depletion trend data for wine and spirits signals a bottoming out of downward trends in key categories, according to the latest SipSource quarterly forecast. The 2025 outlook is for negative growth rates to stabilize by yearend, signaling a shift away from the steep and growing decline levels seen between 2022 and 2024. In total, SipSource projects core spirits (including vodka, whiskey, rum, and gin) to bottom out at a negative 4.56% growth rate by the end of 2025 before rebounding slightly to decline at a negative rate of about 4.1% by Q2 2026. The steep downward trend and negative growth rates seen for rum, US whiskey, vodka, and brandy/cognac are expected to largely flatten by the first half of 2026, albeit in negative territory, per the SipSource report.

• After a record-breaking year for exports, ongoing trade disputes between the US and its trading partners threaten to derail growth for the US spirits industry, according to the Distilled Spirits Council of the United States (DISCUS). US spirits exports hit a record $2.4 billion in 2024, driven by a 39% increase in exports to the European Union, the largest market for US spirits, which has zero tariffs on spirits imports. Exports to the rest of the world fell nearly 10%, reflecting a softening of the global market for spirits. According to DISCUS, the current outlook for US spirits exports is highly uncertain due to ongoing trade disputes, negotiations, and retaliatory tariffs. Canada, the second largest market for US spirits exports, imposed a 25% tariff on all American-made spirits on March 13, and most Canadian provinces have removed all US alcohol products from retail shelves.
• Producer prices for distilleries fell 1.9% in July compared to a year ago, after rising 0.9% in the previous July-versus-July annual comparison, according to the latest US Bureau of Labor Statistics data. Prices for distillers have trended downward or been flat since mid-2023 as sales and demand softened following a steep run up in the aftermath of the pandemic that was fueled by the reopening of bars and restaurants. Moreover, a new Gallup poll finds that the US drinking rate is at a new low amid rising concerns over the health consequences of alcohol. Still, employment by breweries, wineries, and distilleries reached a new high in June, up 4.7% year over year, per the BLS.