When trade soured, this American liquor maker moved to Canada
Canada’s liquor boycott of US products cut Phillips Distilling’s Canadian sales by 70%, pushing it to make Sour Puss in Canada instead.
Intelligence analysis by GPT-5.4 Mini
A Minnesota liquor maker that found its biggest market in Canada was hit hard when provinces pulled US alcohol off shelves in response to Donald Trump’s tariffs. To keep selling, Phillips Distilling shifted some production to Montreal and won its products back into Canadian stores.
A liquor company in Minnesota had a drink that Canadians really liked. Then Canadian provinces got angry about US tariffs and stopped buying many American drinks.
That hurt the company a lot, because most of its Canadian sales disappeared. It was like a store suddenly losing almost all of its best customers.
To keep selling, the company started making some of the drink in Canada instead. That helped the bottles go back on shelves, like moving a lemonade stand closer to the kids who want lemonade.
Analysis
Trade pressure changes business decisions
Phillips Distilling, a family-owned company in Minnesota, says its Sour Puss liqueurs became unusually popular in Canada over the years. That made the company especially vulnerable when most Canadian provinces began boycotting US liquor in spring 2025 as retaliation for Trump’s tariffs.
The impact was immediate and severe. CEO Andy England said the company lost 70% of its Canadian business and described the hit as a disaster. Because Sour Puss sold far better in Canada than in the US, Phillips started looking for a way to keep the brand alive in that market. Within weeks of the provincial bans, it began exploring moving some production north.
By October, Phillips had signed an agreement with Montreal-based Station 22 to produce some of its liquor in Canada. That move helped reopen doors with provincial distributors, starting with Quebec, which then made it easier to speak with other provinces. England says the company now produces and sells in Canada and is on the road to recovery.
The broader backdrop is still unresolved. The US and Canada have not reached a trade deal, and American liquor remains a sticking point in negotiations. Canada’s provincial alcohol boards have broad control over imports and retail sales, which gave them leverage to remove US products. As of May 2026, only Alberta and Saskatchewan were still selling American alcohol, because their liquor retail systems are privatized. The story shows how tariffs can spill beyond big industries and force consumer brands to change where they make their products.
Key points
- Canadian provinces stopped buying many US alcohol products in response to Trump’s tariffs.
- Phillips Distilling says it lost 70% of its Canadian business, with Sour Puss hit hardest.
- The company moved some production to Montreal-based Station 22 to keep selling in Canada.
- Quebec reopened first, and other provinces followed.
- As of May 2026, Alberta and Saskatchewan were the only provinces still selling American alcohol.
