The iconic American whiskey brand Jack Daniel's, along with its parent company Brown-Forman, has found itself at the center of a transnational trade storm—one that’s left Canadian shelves conspicuously bare of U.S. spirits and sent ripples through the global liquor market. In the latest fiscal quarter, Brown-Forman reported a staggering 62 percent drop in sales to Canada compared to the same period last year, a plunge that underscores the deep impact of ongoing trade disputes and shifting consumer landscapes, according to CBC News and WHAS11.
The roots of this downturn trace back to early March 2025, when then U.S. President Donald Trump imposed tariffs on Canadian goods. In swift retaliation, several Canadian provinces yanked American-made alcohol from their retail shelves, creating what Brown-Forman CEO Lawson Whiting called "significant headwinds" for the company’s North American business. Alberta and Saskatchewan have since relented, lifting their bans, but the majority of provinces remain steadfast, leaving American spirits largely absent from Canadian liquor stores.
"While we were encouraged by recent discussions, American spirits products have been off the shelf in Canada for months," Brown-Forman’s Chief Financial Officer Leanne Cunningham told investors during a conference call. She emphasized, "This had a significant impact on our first quarter of fiscal 2026, which will impact our full fiscal year results." The numbers bear out her caution: the company’s total sales dropped 3 percent for the quarter, and net sales in developed international markets fell by 8 percent, with the steepest decline in Canada. For context, the U.K. saw a 16 percent decrease and Germany a 10 percent decrease in sales of Jack Daniel's Tennessee Whiskey.
Brown-Forman’s woes are not confined to North America. The European Union, another major market for Kentucky bourbon, has paused its own retaliatory tariffs on U.S. spirits—but only until February 2026. This reprieve offers a glimmer of hope to American distillers, who are banking on new trade agreements to lure back once-wary retailers across the Atlantic.
"We remain optimistic based on our recent developments related to tariffs under the USMCA," Whiting said on the earnings call, referring to the trade agreement that replaced NAFTA. He added, "Beverage alcohol products produced in the United States remained off the shelves in the majority of the Canadian provinces." Despite these challenges, Whiting pointed to growth opportunities in emerging markets, noting, "Our non-U.S. brands such as Diplomatico and El Jimador continued to deliver growth, they were not able to offset the decline of our brands that are produced in the U.S." He also highlighted promising sales in countries like Brazil and Turkey, and noted that tequila—one of Brown-Forman’s non-bourbon products—continues to perform well.
The impact of the Canadian boycott extends beyond Brown-Forman. According to the Distilled Spirits Council of the United States, Canada was the second-largest market for U.S. spirit exports in 2024. The council welcomed the recent decision by Canadian Prime Minister Mark Carney to remove retaliatory tariffs on USMCA-compliant U.S. goods, including a hefty 25 percent tariff on American spirits. However, the group cautioned, "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." They further warned, "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."
Retailers in Canada, caught in the crossfire, have responded by stockpiling American alcohol, hoping for a resolution that will allow them to restock their shelves and meet consumer demand. The uncertainty has left both Canadian consumers and hospitality businesses scrambling for alternatives or waiting impatiently for their favorite brands to return. Meanwhile, for some American distilleries, the situation is a mixed bag.
Andrea Wilson, Chief Operating Officer and master of maturation at Michter's Distillery in Louisville, described the situation with a note of hope. "Yeah, [in] some of the warehouses, it's still sitting there," Wilson told WHAS11. "It's sort of a mix across all of Canada." Despite the hurdles, Michter's—a family-controlled, super premium brand—has managed to buck the trend, posting a 6 percent increase in sales in the first half of 2025. "We tend to be a super premium luxury brand, and you know that there's a place for that in the marketplace," she said. For Michter's, Canada is the number one export market, and Wilson is optimistic that the holiday season will see their products back in Canadian stores as more provinces reconsider the boycott.
The broader spirits industry is watching closely. The partial lifting of bans in Alberta and Saskatchewan is seen as a positive sign, and there is hope that the remaining provinces will soon follow suit. As Wilson put it, "You know the holiday season is coming. We hope to be able to be a part of that across all Canadian markets." For Brown-Forman, the stakes are high: the Canadian market’s absence has been felt acutely, and recovery hinges on both policy changes and consumer sentiment.
Brown-Forman’s international outlook remains cautiously optimistic. While operating income for the quarter declined by approximately 7 percent and organic net sales dropped nearly 60 percent in Canada, the company is betting on a rebound fueled by easing trade tensions and growth in emerging markets. The next few months will be critical, particularly as the European Union’s tariff pause edges toward its February deadline.
As trade officials in both Canada and the U.S. continue to negotiate, the spirits industry is left in a holding pattern—one that has already reshaped the shelves of liquor stores and the bottom lines of some of America’s most recognizable brands. The question on everyone’s mind: when will the whiskey flow freely again across the border?
For now, Brown-Forman and its peers are bracing for a challenging fiscal year, but with one eye on the calendar and another on the negotiating table, there’s hope that the next round of quarterly numbers will tell a much happier story.