Canada Dumped U.S. Alcohol Amid Tariff Turmoil. Here’s What Canadians Are Drinking Now Instead.

In the year-plus since most Canadian provinces and territories stopped selling imported drinks from the U.S., the huge cost to stateside brands is now clear, with overall exports of spirits down 3.8 percent and the struggling wine industry facing a sudden $357 million gap in foreign sales. But if American beer, wine, and spirits makers are losing bigly in the Great White North, who are the winners in that situation?

According to Shannon Lynch Colbourne, president and CEO at Cape Breton Beverages in Nova Scotia, it’s not a bad time to be a small producer in Canada.

“When that shift happened, a lot of people switched to local,” she says. “I think consumers are pleased to know that you can get high-quality, locally made products that compete with large international brands.”

Across Canada, smaller, regional producers are seeing big increases, according to many of the liquor control boards that regulate sales of alcoholic beverages in each province. In addition, brands from other parts of the world are starting to find entry into the Canadian marketplace, now that U.S. producers are out of the picture.

Discovering Local Flavors

In a statement to VinePair, the Nova Scotia Liquor Corporation (NSLC) said that overall sales of products from Nova Scotia saw an increase of 11.3 percent over the past year, with spirits and wine from the province up 14.5 and 14.1 percent, respectively. Among the breakout brands, the NSLC noted, was a product under the Cape Breton umbrella: Blue Lobster Vodka.

Until recently, that brand’s availability was mostly limited to Atlantic Canada. But soon, customers in most regions should be able to pick up a popular, ready-to-drink (RTD) version, Blue Lobster Vodka Soda.

“We signed a national distribution deal in the last month or so to grow [that brand] across Canada,” Colbourne says.

Similar stories can be found in other locations and other product categories. In the country’s most populous province, the Liquor Control Board of Ontario (LCBO) has seen major changes since March 4, 2025, when Ontario Premier Doug Ford ordered the Crown agency to remove all U.S. products from sale. The LCBO may not be the single largest purchaser of alcoholic beverages in the world, but it certainly ranks as one of the biggest, with a near-monopoly on the sale of the hard stuff for an estimated 16 million people in Ontario. Until that change, the LCBO was responsible for annual sales of about $705 million in U.S. spirits, wines, and beer, spread over 3,600 different products imported from 35 U.S. states. Those days are over, at least for now, with many of the perishable U.S. bottles sitting in LCBO warehouses heading toward expiration.

In a statement to VinePair, the LCBO said: “Ontario consumers have been quick to adopt new alternatives. Notably, Canadian and Ontario-made products have seen positive growth.” Those increases, the agency wrote, include a bump of 52 percent for wines made from Ontario-grown grapes, 20 percent growth for wines from other Canadian provinces, and a remarkable 94 percent increase for sales of “deluxe” Canadian whisky.

Whiskey might be where the changes hit the hardest. On the same shelves that once held Jim Beam, Jack Daniel’s, and other historic names from this side of the 49th parallel, locals are discovering up-and-coming brands like Barnburner Whisky from Ontario’s Maverick Distillery. Sales of that company’s whiskies are up 300 percent at the LCBO, CEO Craig Peters says, and the distillery has never been busier. (The company’s vodka is up just 100 percent in the past year, he clarifies.)

“That kind of movement doesn’t happen unless consumer behavior really changes,” he says. “We’re seeing unbelievable growth, and the push to buy Canadian products is a real thing. It’s not just talk anymore.”

Most consumers are familiar with the LCBO’s retail outlets and online shop. But as the exclusive alcohol wholesaler for the province, the LCBO affects on-premise sales, too. While the absence of U.S. brands from shelves in retail stores made headlines last year, Peters says that the biggest shift is happening behind the stick.

“What’s different this time is that people aren’t just swapping one bottle, they’re rethinking the whole bar,” he says. “Traditionally, those rail spots were locked up by big U.S. brands for decades. Now we’re seeing bars, especially independents, completely reset and go Canadian across the board. Not just a feature cocktail, but their rail vodka, their rail whiskey, everything.”

While the original inspiration might have been for Canadians to “buy Canadian” as a kind of substitute, it’s now becoming a preference for many in Ontario, he says. Demand is up just about everywhere, and several smaller local producers are bumping up against their production limits. “But it’s a good problem to have,” Peters says.

The interest in Canadian and regional products seems to go much deeper than the initial “elbows up” attitude that spread across the country in response to the aggressive tariffs and bellicose language from the U.S. administration, especially for those who care about the drink industry’s heavy carbon footprint. If you’re in the Nova Scotia capital of Halifax, a bottle of Blue Lobster Vodka from Cape Breton Beverages clearly has a much lower environmental impact than a best-selling import like Tito’s from Austin, Texas. In terms of food miles, it’s more than 10 times better, with shipments clocking just 250 miles, versus over 2,600.

The importance of supporting local businesses was already popular in Nova Scotia before the U.S. launched its tariffs, Colbourne notes. The U.S. trade war encountered a longstanding sense of local pride and a widespread understanding that buying local really helps the economy, especially in smaller, less populated regions.

“We employ almost 200 people in Nova Scotia across the province,” Colbourne says. “Each employee has a family that needs teachers and lawyers and all those other things. The economic multiplier effect is real.”

Europe Enters the Chat

While Canadian brands have clearly picked up market share, other players are eager to get into the game. The Finnish rye whisky maker Kyrö originally tried to get listed in the LCBO years ago, co-founder Mikko Koskinen says, but disappointingly, the brand didn’t get picked up. Last fall, an industry source whispered that the team should try again.

“We got tipped that now might be a good time to offer products — and especially whiskey — to Canada,” he says. “The political shift has cleared shelf space, and when shelf space is opened up, that’s an opportunity.”

“We’re seeing unbelievable growth, and the push to buy Canadian products is a real thing. It’s not just talk anymore.”

Bottles of Kyrö’s 100 percent malted rye whisky should be available through the LCBO sometime this fall. For Koskinen, it feels like a natural fit, with cultural connections that go well beyond just hockey and snow, especially when it comes to styles of whiskey.

“They have a taste of rye,” he says. “There’s also a lot of Finnish heritage in Canada. It feels like there’s a shared value base.”

Anecdotally, there also seems to be greater availability of Irish whiskey on Canadian shelves in recent months, especially from less common producers, and far more sake from Japan. Combined, all of that increased competition is inspiring local producers to up their game. Peters says that the mood among distillers is “pretty energized.”

“There’s a sense that this is a real moment for Canadian producers to step up and prove we can compete at scale, not just as craft, but as everyday choices,” he says. “There’s more collaboration, more communication, and a shared feeling that we’ve been given an opening, and we don’t want to waste it.”

From his vantage point in Europe, Koskinen sees it as a chance for the Canadian whisky industry to develop further. When you’re competing with gigantic, global brands from Kentucky and Tennessee, it’s hard not to be influenced by them. Without them, you can define your products on your own terms. The current situation could inspire a real renaissance in Canadian whisky, he says.

High Stakes for Future Sales

While clearing U.S. products from all LCBO stores across Ontario got plenty of attention, not every province has taken the same hardline approach. Although B.C. Liquor stopped importing and retailing U.S. products in British Columbia on March 10, 2025, it continued to sell off already-imported stateside booze through its wholesale distribution channels. Meanwhile, Alberta and Saskatchewan both still import and sell U.S. alcoholic beverages at the retail level, though last week the CBC reported that sales of those imports in Alberta are noticeably down compared to two years ago, with reductions of 13.5 percent for U.S. spirits, 42 percent for wine, and 92 percent for beer.

“What’s different this time is that people aren’t just swapping one bottle, they’re rethinking the whole bar. Traditionally, those rail spots were locked up by big U.S. brands for decades. Now we’re seeing bars, especially independents, completely reset and go Canadian across the board. Not just a feature cocktail, but their rail vodka, their rail whiskey, everything.”

Long-term, it’s unclear if the consumer trends from the past year or so are going to stick around, if and when U.S. politics get back to “normal” — or at least something less disorganized and belligerent toward one of our largest trading partners and closest allies. At this point, it looks like that might take time. In late November, the NSLC issued a statement that it would begin selling off its remaining U.S. inventory, mirroring the approach taken by British Columbia and other provinces, adding, “We will not be purchasing any product that is made, manufactured and/or produced in the U.S.” Last week, Ontario Premier Doug Ford said again that his province will not put any U.S. alcohol back on the shelves until the country gives up its trade war.

For small Canadian producers, those uncompromising stances might take some of the pressure off. But at the same time, it’s clear what’s at stake.

“Everyone knows this isn’t just a short-term bump,” Peters says. “It’s a chance to permanently earn that shelf space and those tap handles.”

Colbourne says things are looking pretty good for now. With U.S. products largely off the shelf, her brands are seeing sustainable growth, as well as return customers.

“It allowed people to open up their eyes and realize, and now they’re making more conscious decisions,” she says. “It’s nice to see that people are sticking with it.”

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