Guelph distiller calls U.S. market a steep uphill battle compared to Ontario

The cross-border trade war has highlighted the imbalance between the alcohol markets in Canada and America.

Ever since Ontario banned American alcohol, sales have been flowing at one Guelph distillery. While that’s good news for Dixon’s Distilled Spirits, the owner said the cross-border trade dispute highlights the imbalance between the two markets. Jeremie Dixon said craft distillers face a steep uphill battle when trying to sell their products south of the border compared to American brands who enjoy streamlined access in Canada.

“We’ve sold about 50 cases in California in the last two years, and we’ve sold about 50 cases this week with the LCBO,” Dixon explained. He wants the industry to take hard look at market access, even as U.S. politicians actively lobby to reverse Ontario’s alcohol ban . Under normal trade conditions, American brands can easily access Ontario’s entire market through the LCBO while Canadian craft producers fight a fragmented regulatory system in the U.S.

“When I go to the [United] States, I have to deal with multiple markets, multiple distributions, multiple agencies,” Dixon explained. “I walk into a store, and I see California sections and American whiskey sections. There is no way that would even happen for a manufacturer like me.”

Even if the trade dispute is resolved and American products return to Canadian shelves, he would like the province to permanently protect shelf space. Dixon suggested putting a cap on imported American products to ensure local and national brands have an equal showcase. Sarah Chapin, the spokesperson for Ontario’s finance minister, said in a statement to CTV News that the government wants to highlight local producers.

“We continue to look for ways to champion Ontario-made alcohol products across Canada and around the world, including cutting red tape and removing trade barriers so our producers can expand into new markets and thrive,” Chapin wrote, adding that the province has already expanded dedicated shelf-space requirements for grocery and convenience stores, while directing the LCBO to actively promote Ontario-made brands. The finance minister’s office also noted a first-of-its-kind agreement with Nova Scotia to allow consumers to purchase alcohol directly from local producers in Ontario. “We continue to lead the way on tearing down interprovincial trade barriers and call on other provinces to join us,” Chapin said.

Storage costs Ontario’s tab for locking up tens of millions of dollars worth of U.S. alcohol is estimated at $8 million -- and the province says it has no plans to put those bottles back on store shelves without some kind of resolution to the trade war. The Liquor Control Board of Ontario (LCBO) told CTV News that, during an audit in May, 97 per cent of the U.S. products in storage were in good condition and within their normal shelf-life. By the end of March, however, at least $2.6 million of the banned booze had spoiled.

Before the trade war, the LCBO said U.S. alcohol sales in Ontario totalled $965 million annually. It also listed more than 3,600 products from 35 states. While provinces like Saskatchewan and Alberta have already reversed their American booze bans, Ontario and Quebec have decided to stay the course .

“Canadian provinces cannot be allowed to hold American wineries, breweries and distilleries hostage and attempt to ransom them,” U.S. Congresswoman Claudia Tenney said in a news release. Ontario Premier Doug Ford, who is adamant that the ban will remain in place until the trade war is over, reacted to the news by pointing the finger back at President Donald Trump’s administration.

“U.S. tariffs are threatening the livelihoods of hundreds of thousands of Canadian workers, including here in Ontario,” Ford wrote in a tweet. “We won’t back down. The fastest and only way to get U.S. alcohol back on Ontario shelves is for the U.S. to drop its illegal tariffs on Canada.”

With files from Abigail Bimman, Elianna Lev, and The Canadian Press