'We’re suffering for it' — Kentucky bourbon distillers impacted by Canadian booze bans as spirit exports drop a staggering 70%

In Ontario, taxpayers are paying to store roughly CA$79 million worth of U.S. alcohol that the province won’t let the Liquor Control Board of Ontario (LCBO) sell. And since Sept. 29, a U.S. ban on most packaged Canadian alcohol has cut many smaller Canadian producers off from their largest export market. Here’s where the money is going and what it means if you still want a bottle of bourbon.

How hard has Canada’s booze boycott hit Kentucky?

According to the Distilled Spirits Council of the United States (DISCUS), a national trade group representing American spirits producers, U.S. exports to Canada have dropped from US$232 million a year before the bans to US$72 million. That’s a 70% decline.

Data from the Kentucky Distillers’ Association (KDA), the state’s industry group, shows Kentucky bourbon and whiskey exports to Canada fell 42.4% in 2025, to US$25.2 million.

“We’re just getting caught up in it and we’re suffering for it,” Bard told CTV News.

Where the boycott stands now

The boycott isn’t nationwide, though. Alberta and Saskatchewan resumed selling U.S. alcohol in June 2025, but the other eight provinces still haven’t restocked it. However, after trade talks collapsed and the U.S. imposed a 50% tariff on Canadian alcohol on Aug. 22, Saskatchewan retaliated with its own 50% levy on U.S. alcohol that took effect Sept. 8. In fact, the White House cited that tariff when it banned Canadian alcohol outright in September.

While American alcohol imports have resumed in Alberta, demand for U.S. wine has failed to rebound. “The mass boycott of American wines has really shifted the product mix like I’ve never seen before,” Calgary liquor retailer Andrew Ferguson told Postmedia in October 2026, noting that shoppers continue to leave U.S. bottles untouched on the shelf.

What is the boycott costing Canadian taxpayers?

Ontario took the hardest line. Unlike most provinces, Ontario barred the LCBO from even selling its existing American inventory.

That left roughly CA$79 million worth of U.S. alcohol sitting in storage, with the LCBO noting that taxpayers have spent about CA$8 million warehousing it. Roughly CA$2.6 million worth, or 3.3% of the original stockpile, has since expired.

In an analysis published in The Conversation in mid-October, Michael Armstrong, a professor of operations research at Brock University, puts the tab higher. He estimates about CA$20.4 million in inventory write-downs, close to CA$10 million in warehousing costs and nearly CA$3 million in implied interest. That adds up to CA$33.4 million over 20 months, or 42% of what the stockpile was originally worth.

Those costs land while the LCBO is already sending less money to the province. It generated CA$1.8 billion for Ontario in the fiscal year ended March 31, 2026, which is down CA$358 million from the year before. Most of that drop follows the province’s decision to let grocery, convenience and big-box stores sell alcohol. The cost of the stockpile adds to the shortfall.

Why are Canadian producers now feeling the squeeze?

On Sept. 29, 2026, the U.S. banned imports of most packaged Canadian alcohol, including whisky, vodka, beer and wine, covering roughly US$800 million in Canadian alcohol the U.S. imported last year.

Distillers have the most to lose. Analysts cited by the Canadian Press say Canadian spirits makers send more than half of their production to the U.S., a far larger share than brewers or wineries. In 2025, the U.S. imported US$691 million worth of Canadian spirits, according to DISCUS.

The ban does exempt whisky and liqueur sold in containers larger than 4 litres. But Cal Bricker, CEO and president of Spirits Canada — a trade association representing Canadian distillers — says few 4-litre bottles are sold in the first place. Big brands can work around the ban, as Crown Royal ships its whisky in bulk and bottles it in the U.S. Smaller distillers that bottle domestically don’t have that option.

Some are already changing course. Stratford-Fox Distillery, an Ottawa-area producer, shelved its plan to enter the U.S. market after trade talks collapsed in August, and is now pursuing listings in other provinces and in Europe.