Canada’s decision to end retaliatory tariffs on goods covered in the U.S.-Mexico-Canada trade deal from the first Trump Administration is a good first step for Kentucky alcohol exporters. That’s according to Eric Gregory, president of the Kentucky Distillers Association. He said the next step is formal trade talks that can get American liquors yanked off Canadian store shelves back on them.
“They're still off the shelf in all provinces and territories, except for Alberta and Saskatchewan. We’re back on the shelves there. This is a good step to show that these products are covered under the previous free trade agreement that was signed, and if they can work out a deal and get us back on shelves, the sooner, the better,” he said.
Gregory said Canada is Kentucky’s biggest spirits importer, with about $100 million worth sold there each year – and Canada’s response has hurt distillers of all sizes.
“A lot of people think that this just hurts the big distillers, and it actually hurts all distillers. We've got a lot of craft distillers in Kentucky who have been around for a few years, and their bourbon is just now coming of age, and so they were growing and making more whiskey to try to get into some of the foreign markets,” he said.
Gregory said trade uncertainty may be the biggest challenge for a signature Kentucky industry.
“Time will tell the ultimate effect on what this means for Kentucky bourbon. Right now we're losing valuable export dollars, and it's caused a lot of hesitation from distillers as to what markets to invest in and what markets to be growing towards,” he said.
Gregory said another test is Gen Z’s approach to alcohol – the 28-and-under crowd is drinking less of it.
