LOUISVILLE, KY — Brown-Forman, the parent company of iconic American brands like Jack Daniel's Tennessee Whiskey and Woodford Reserve bourbon, is feeling the sting of Canada’s trade dispute with the United States. During a recent conference call with investors, company officials revealed that sales to Canada plummeted by a staggering 62% in the latest fiscal quarter compared to the previous year.

The significant drop comes as American-made spirits remain off the shelves in many Canadian provinces. The widespread removal of U.S. alcohol was a retaliatory measure taken by Canada after U.S. President Donald Trump imposed tariffs on Canadian goods in early March. While some provinces, including Alberta and Saskatchewan, have since lifted the ban, the economic fallout for American distillers is proving to be substantial.

“While we were encouraged by recent discussions, American spirits products have been off the shelf in Canada for months,” said Leanne Cunningham, Brown-Forman's chief financial officer. “This had a significant impact on our first quarter of fiscal 2026, which will impact our full fiscal year results.”

The full dollar value of the 62% drop is unclear, but the company's total sales were down three percent for the quarter. Company CEO Lawson Whiting acknowledged the “significant headwinds” created by the trade dispute. He noted that while non-U.S. brands like Diplomatico and El Jimador continued to grow, they couldn't make up for the sharp decline of their American-produced products.

The Canadian boycott was a primary driver of an eight percent decrease in net sales across developed international markets. This decline was also fueled by lower volumes of Jack Daniel’s in Germany and the United Kingdom, which saw decreases of 10% and 16% respectively. However, the largest and most dramatic drop was in Canada.

Last week, Canadian Prime Minister Mark Carney announced that Canada was removing retaliatory tariffs on CUSMA-compliant U.S. goods, which had included a 25% tariff on American spirits. This move was welcomed by the Distilled Spirits Council of the United States, which has been pushing for an end to the trade war.

Canada is a critically important market for U.S. distillers, ranking as the second-largest export market for American spirits in 2024. The council welcomed Carney’s decision but emphasized that the action will have limited impact until provinces reinstate American spirits to retail shelves.

"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," the organization said in a press release. "The unfortunate decision to remove American spirits from Canadian retail shelves is not only harming U.S. distillers, but it's also needlessly reducing revenues for the provinces, and placing unnecessary burdens on Canadian consumers and hospitality businesses."

The ban has resulted in a significant stockpile of products. The Nova Scotia Liquor Corporation (NSLC), for example, has amassed 587,153 units of American alcohol. The situation underscores the far-reaching consequences of trade disputes, which are hurting not only American producers but also Canadian consumers and provincial revenues.

The U.S. liquor sector continues to lobby the Trump administration for a resolution, hoping for a swift end to the trade war that has created a significant financial setback for a multibillion-dollar industry. Until then, American distillers like Brown-Forman will have to navigate the choppy waters of international trade, hoping that the flow of their products across the northern border can soon resume.

[Copyright (c) Global Economic Times. All Rights Reserved.]