Unexpected Consequences of American Liquor Ban – Has Pulling U.S. Spirits from Canadian Liquor Stores Backfired?

Is Canada experiencing the unintended consequences of the American liquor ban? In March 2025, the BC government pulled American liquor from BC Liquor Stores and halted further importation in response to Trump’s tariffs. Once remaining stocks ran dry, government and private liquor store shelves were barren of any U.S. alcohol products.

BC, Ontario and other provinces continue the ban, while Saskatchewan and Alberta ended their bans in March and June, respectively. Some independent liquor store owners in those provinces think ending the ban won’t do much to increase sales, because many consumers will continue boycotting American products.

Industry experts are reporting what may be an unforeseen affect of the American liquor boycott – a downward turn in spirits sales overall. According to Spirits Canada, while sales of U.S. spirits in Canada fell dramatically, by the end of April, there was also a concerning decline in the sales of Canadian products and total spirits sales. Cal Bricker, Spirits Canada CEO, explains that the North American sector is highly interconnected and the removal of U.S. liquor products from Canadian liquor stores is causing problems on both sides of the border.

From early March (the start of the ban) to the end of April:

• U.S. spirits sales in Canada were down by 66%
• Canadian spirit sales in Canada were down by 6.3%
• Total spirits sales in Canada were down by 12.8%

Compared to the previous March, total spirit sales fell by just over 20% year-over-year.

Spirits Canada and the Distilled Spirits Council of the U.S. are urging their respective governments to negotiate a “zero-for-zero” tariff agreement.

Is the American Liquor Ban Backfiring or are Consumers Buying Less Spirits in General?

While we at Thrive Liquor & Cannabis Advisors don’t doubt Spirits Canada analysis cited above, we wonder how much of the Canadian spirits sales decline can be directly attributed to the boycott on U.S. liquor and how much is because Canadians are simply drinking less? According to Statistics Canada, from 2023 to 2024, Canada had its its largest ever decline in alcohol consumption since the agency began tracking alcohol sales back in 1949.

Decline in sales volume by broad alcohol categories:

• Beer: down 4.5%
• Wine: down 4.8%
• Spirits: down 3.9%

Ciders/coolers was the only category that showed growth with sales up 6.9% and sales by volume increasing by 1.3%.

Alcohol consumption in BC was in-step with national figures. For the fiscal year 2023/24, data from the Victoria-based Canadian Institute for Substance Use Research revealed a 9% decrease in alcohol consumption in BC – the largest decline seen since they started tracking data in 2001.

A decrease in alcohol consumption in North America is thought to be led by Gen Z who are the most health conscious generation ever. Millennials drink less than Gen X and Boomers, and Gen Z drinks 20% less than Millennials (source: “Alcohol Consumption In Gen Z, Millennials, Gen X, And Baby Boomers”). This increased health consciousness has led to a surge in no-and-low alcohol sales in recent years.

BC Liquor Retailers are Optimistic

While Spirits Canada analysis reveals that non-U.S. spirits sales were also down a month after Canadian liquor stores pulled U.S. liquor from their shelves, our BC clients have seen positive change since then. Through the summer and into September, our retail liquor clients report good, consistent overall sales, providing cause for optimism.

The Canadian economy is showing some resiliency in light of tariffs after an initial period of contraction. RBC is predicting low but positive economic growth for the rest of year because of a stabilizing economy, Federal economic support, limited layoffs, and Central Bank flexibility. Thrive is also receiving a noticeable uptick in phone calls about our liquor license consulting services, and increased contacts from both buyers and sellers of liquor stores  – both very good signs.

About Thrive Advisors

Thrive Liquor & Cannabis Advisors are western Canada’s leading liquor consultants. We provide liquor license consulting and operational expertise to liquor stores, restaurants, bars, and manufacturers. Whether your business is  a start-up or an existing business, our consultants can help you thrive.