American liquor maker Phillips Distilling has moved some of its production to Canada, a drastic measure taken to counter the effects of a trade war between the two countries. The company, based in Minnesota, lost 70% of its Canadian business after most provinces boycotted American-made liquor in retaliation for US tariffs. This move has allowed Phillips Distilling to get its products, including the popular Sour Puss liqueur, back on store shelves across Canada.
The boycott, which began in Spring 2025, was a response to US President Donald Trump’s tariffs against Canada, and it had a significant impact on Phillips Distilling’s sales. CEO Andy England described the situation as “a disaster,” but the company has since recovered by shifting some production to Canada. The company signed an agreement with a Montreal-based alcohol manufacturer to start production, and Canadian distributors have been receptive to the move.
Trade War Impacts US Liquor Makers
The trade war between the US and Canada has had far-reaching consequences for US-based liquor producers, with many taking a financial hit. However, Phillips Distilling is one of the only companies to shift some production to Canada. The company’s decision to move production north of the border was driven by the popularity of its Sour Puss liqueur in Canada, which accounts for the majority of its sales.
The trade war has also had an impact on the Canadian provinces, with only two provinces, Alberta and Saskatchewan, still selling American alcohol. The other provinces have been unwilling to lift the boycott until the US lowers or lifts tariffs on key Canadian sectors such as automotives, metals, and lumber. Phillips Distilling’s decision to shift production to Canada has allowed the company to navigate this complex trade landscape and get its products back on store shelves.
Recovery and Future Implications
Phillips Distilling’s move to Canada has been seen as a success, with the company’s products once again available in stores across the country. The company’s decision to shift production north of the border has also been praised by Canadian distributors, who are excited to have the products back on their shelves. However, the trade war between the US and Canada remains unresolved, and it is unclear what the long-term implications will be for US liquor makers.
The situation highlights the complexities of international trade and the impact that tariffs and boycotts can have on businesses. As the trade war between the US and Canada continues, it is likely that other companies will be forced to make difficult decisions to protect their interests. The move by Phillips Distilling to shift production to Canada serves as a reminder of the importance of adaptability and flexibility in the face of changing trade landscapes.
