Phillips Distilling, a family-owned Minnesota-based spirits company, has moved some of its production to Canada after losing 70% of its Canadian Business due to a liquor boycott.
The boycott began in Spring 2025, when Canadian provinces started pulling American-made alcohol from shelves in retaliation for US President Donald Trump’s tariffs against Canada.
The company’s flagship product, Sour Puss, a brightly coloured fruity liqueur popular with Canadian university students, was hit hardest by the provincial ban.
CEO Andy England described the loss of Canadian sales as “a disaster”, saying that if the company sold 1,000 cases of Sour Puss in the US, he “would be surprised”, viewing it as “very much a Canadian brand”.
By October, with no signs of either the tariffs or the provincial liquor ban ending, Phillips Distilling signed an agreement with Montreal-based alcohol manufacturer Station 22 to begin Canadian production.
“We produce and sell in Canada,” England told the BBC, adding that the company had “convinced all of the provinces to take back some of our products” and was “on the road to recovery.”
Quebec was the first province to agree to stock the Canadian-produced Sour Puss, which England said helped facilitate conversations with other provinces across the country.
As of May 2026, eight out of ten Canadian provinces are still refusing to sell American alcohol, with only Alberta and Saskatchewan continuing sales due to their fully privatised liquor retail systems.
Meredith Lilly, a professor of International economic policy at Carleton University in Ottawa, noted that Phillips Distilling’s shift was easier than it would be for producers tied to a specific geographic identity, such as Kentucky bourbon or California wine.
Lilly added that, because a significant portion of their business is Canadian, Phillips Distilling risked “no reputational penalty in the US” for relocating production north of the border.
She described some premiers’ decision to pull American liquor from shelves as “a heat of the moment” response, one that had accidentally resulted in bringing more production to Canada.
“I don’t think it was envisioned that (the boycott) would be in place as long as it has been,” Lilly said, warning that the decision to return US alcohol to shelves ultimately rests with provinces, not Prime Minister Mark Carney’s government.
US Commerce Secretary Howard Lutnick has called the liquor ban “outrageous”, “insulting” and “disrespectful”, and the US has flagged it as a main irritant in ongoing trade negotiations between the two countries.
Carney has indicated that provinces may be willing to resume selling American alcohol if tariffs on key Canadian sectors, including automotives, metals and lumber, are lowered or lifted.
For England, however, the events of the past year have already reshaped how Phillips Distilling operates, and he suggested those changes are likely to be permanent regardless of how negotiations unfold.