US Spirits Exports Continue to Tumble, Dragged Down by 85% Decline in Canada

(Photo: AP Photo/Keith Srakocic)

U.S. spirits exports have continued to decline sharply in key markets across the globe, according to a report published on Monday by the Distilled Spirits Council. Exports reportedly fell by 9% in the second quarter of 2025, dragged down by a handful of double-digit drops in countries reacting to ongoing trade tensions.

The most dramatic shift took place in Canada, where exports plunged by 85% to below $10 million. Though Canada has lifted its retaliatory tariffs against American spirits, provinces including Ontario, Quebec and British Columbia have followed through on a nearly year-long ban of U.S.-made alcohol. Ontario alone is responsible for distributing alcohol to nearly 40% of Canada’s population, pulling in a gross revenue of $7.4 billion in 2023.

Spirits exports to the U.K. and Japan reportedly declined by more than 23%, while E.U. exports tumbled by 12%.

DISCUS President and CEO Chris Swonger warns that tariffs and a preference for locally produced alternatives may be to blame.

“After celebrating a record year for U.S. spirits exports in 2024, this new data is very troubling for U.S. distillers,” Swonger said in a statement. “Persistent trade tensions are having an immediate and adverse effect on U.S. spirits exports. There’s a growing concern that our international consumers are increasingly opting for domestically produced spirits or imports from countries other than the U.S., signaling a shift away from our great American spirits brands.”

The export slump has arrived at an especially inopportune time for distillers. Alcohol sales are down across the board, and tariffs aren’t the only culprit at play. According to a recently released Gallup poll, the percentage of U.S. adults who say they consume alcohol has fallen to 54%, down from at least 60% between 1997 and 2023.

In June, Brown-Forman CEO Lawson Whiting blamed the trend on what he dubbed “the same big three” — weight loss drugs, cannabis use and declining demand among Gen-Z consumers. Asahi Breweries chief executive Atsushi Katsuki offered a simpler explanation, arguing that the rise in gaming and digital entertainment has kept drinkers away from on-premise spending.

Whatever the cause of the industry’s woes, it’s clear that the downturn has already caught up with leading spirits producers.

At the beginning of the year, Brown-Forman announced that it was laying off 12% of its global workforce, equivalent to roughly 650 employees. The Kentucky-based spirits conglomerate is responsible for American brands including Jack Daniel’s, Old Forester and Woodford Reserve, plus international names like Herradura Tequila and Diplomatico Rum.

Elsewhere, British conglomerate Diageo recently announced the temporary closure of its Balcones and George Dickel whisky distilleries in Texas and Tennessee, respectively.