By Ed White
WINNIPEG, Manitoba, Sept 29 (Reuters) – As a US ban on many Canadian alcohol imports takes effect on Tuesday, John Cote had hoped to boost domestic sales of his Black Fox artisanal whisky and gin by tapping a wave of “buy Canadian” sentiment during the trade war with the United States.
But it won’t be easy for him to ship bottles from his Saskatchewan distillery to shelves across the nation.
Cote and other brewers, distillers and winemakers say they will struggle to make up for lost US revenues by turning to the Canadian market due to a patchwork of regulations that complicate sales across provincial borders.
Many provinces have monopolies on alcohol sales, and they seem reluctant to accept outside products that would compete with local producers, making it hard to win space in shops, they told Reuters.
“Everybody says ‘We should support Canadian products’. But from governments, it’s just talk,” said Cote.
He said he had sold some whisky at a recent event in Ontario, but lost money on every bottle due to bureaucratic costs and a three-week delay getting permission.
PROVINCIAL PATCHWORK
A Canadian government spokesperson told Reuters there is “much more to do” to streamline provincial regulations in the face of US actions, including the import bans that took effect just after midnight.
The bans on many Canadian alcoholic beverages, motorcycles and dairy products came after talks involving President Donald Trump and Prime Minister Mark Carney broke down last month.
The sides have adopted rounds of counter-tariffs since early 2025, when most Canadian provinces blocked imports of US alcohol in response to Trump’s initial volley.
Trade barriers between Canada’s provinces have slowed Carney’s efforts to reform the G7 economy and reduce its reliance on the US, its top trade partner.
Carney had pledged to eliminate the barriers just after his election last year, and last week proposed legislation to speed up approvals for natural resource projects and to make the economy more competitive.
In July, 9 of Canada’s 10 provinces agreed to a system allowing producers to sell alcohol products directly to consumers anywhere — but not on store shelves, which is vital for sales.
MORE TO DO
A spokesperson for Dominic Leblanc, Canada’s minister in charge of internal trade, praised the July agreement and said the government had removed all federal barriers to internal trade, and had urged provinces to do the same.
“This is meaningful progress, but we know there is much more to do, especially as our largest trading partner, the United States, fundamentally changes its approach to trade and imposes new unjustified tariffs on Canadian goods,” spokesperson Eve Loignon-Giroux said.
Liquor trade experts said provinces are key to streamlining regulations but many of them own and control alcohol stores and warehouses, and have little incentive to act. Especially in British Columbia and Ontario, the country’s main wine producers, there appears little interest in allowing easier access to outside products, the experts said.
“It’s just been so complicated, so difficult,” Jeff Guignard, president of Wine Growers British Columbia, said of efforts to get his province’s wine onto retail shelves across Canada. He said it is often easier for Canadians to buy wine from Europe or Australia than from another province.
BOTTLENECKS
According to Spirits Canada, the national industry group, about half of spirits produced are exported, with 93% destined for the US. Smaller amounts of wine and beer go south over the border.
Washington’s new measures still allow imports of many bulk, unbottled alcoholic beverages, but they ban bottled whisky and most other packaged alcoholic beverages.
The big global brands that own some of Canada’s best-known whiskies, such as Crown Royal, Canadian Club, and J.P. Wiser’s, might be able to shift bottling operations to the US and avoid the ban, analysts and distillers told Reuters. But most small distillers bottle in-house or locally, so they are effectively blocked from the US market.
WHISKY WAITING ON DOCK
Lauchie MacLean, owner of the Glenora whisky distillery in Nova Scotia, normally relies on US states like New York, California and Illinois for about one third of his sales.
He had hoped to send a shipment of single-malt before the September 29 deadline, but the buyer was turned off by the 50% US tariffs on certain Canadian exports already imposed on August 22.
“That order is in the tank sitting on our dock, and won’t be going to the United States any time soon,” MacLean said.
He said he sees only limited potential for buyers across Canada to fill the gap due to high costs of small producers breaking through the provincially-regulated and controlled markets.
Guignard of the BC wine growers association said it was time to create a “Canadian marketplace” by reforming the system. “Let’s double down on treating domestic industries as economic development. It’s the best defence against the States,” he said.
(Reporting by Ed White; Editing by Caroline Stauffer and Jonathan Spicer )
Comments