Caledonia Spirits, a whiskey, vodka and gin distillery in Montpelier, had 120 cases of its Barr Hill gin on the loading dock and ready for shipment to Canada on February 3 when the province of Québec abruptly canceled its order. It was the day before President Donald Trump’s 25 percent tariffs on imports from Canada were set to begin.
While the president ultimately delayed the bulk of the tariffs until April 2, the damage was done. Ryan Christiansen, Caledonia’s president and head distiller, asked Québec’s liquor agency, La Société des alcools du Québec, to reconsider its refusal to accept the cross-border shipment. It did not.
“They didn’t say pause; they didn’t say, ‘Let’s hold on this until this is resolved,'” said Christiansen, who has been doing business in Québec for 10 years. He was left with about 900 bottles of gin, labeled in French, that cannot be sold domestically as currently packaged.
“I’d say with about 90 percent certainty we’re not going to recoup the cost.” Ryan Christiansen
Within days of the tariff back-and-forth, other U.S. distillers were feeling similar pain. Each of Canada’s 10 provinces handles alcohol regulation and sales differently, and three — Ontario, Québec and Nova Scotia — moved to ban all American products from government-run liquor stores.
The boycott, in response to U.S. tariffs and Trump’s threats to acquire Canada as the 51st state, means shelves once laden with U.S. booze have been replaced with signs that say, “Buy Canadian Instead.”
Deteriorating relations with Canada are negatively impacting certain sectors of Vermont’s economy. Longtime visitors are canceling reservations at restaurants and lodging and making it clear they’re doing so in protest of Trump’s trade offensive.
And more official Canadian retaliation against U.S. producers stands to damage artisanal Vermont distilleries such as Caledonia Spirits, which relies on small but growing sales in Montréal to supplement a regional customer base in the U.S.
At a press conference last week, Gov. Phil Scott said he had taken up the matter with Ontario Premier Doug Ford and Nova Scotia Premier Tim Houston.
‘The emotions are running high on both sides of the border, which is unfortunate,” Scott said. “These are friends to the north.”
Only three of Vermont’s 20 or so craft distillers — Caledonia Spirits, Lost Lantern and WhistlePig — distribute their products in Canada, according to Mimi Buttenheim, president of the Distilled Spirits Council of Vermont. But the state doesn’t track how much Green Mountain-made booze is sold north of the border, according to Wendy Knight, commissioner of the Vermont Department of Liquor and Lottery.
“A decline in Canadian visitors this summer would directly impact our bottom line.” Mimi Buttenheim
There are reasons that it’s difficult to sell there: The Canadian market has different regulations, and the provincial liquor authorities mark up the prices sharply.
But Buttenheim noted that more than half of the state’s distillers buy packaging, such as cardboard boxes and bottles, from Québec suppliers. Buttenheim is one of them: As president of Mad River Distillers in Warren, she buys boxes and glass from companies in Québec. The chaos created by the changing edicts from Washington, D.C., have made it hard to plan, especially because prices in the heavily regulated industry are set months in advance.
“We have an order placed, but with the uncertainty over the tariffs, on-again and off-again, by the time it’s ready, I have no idea what the extra fees involved will be,” she said.
Buttenheim expects to see a larger loss this year on the tourism side, particularly at tasting rooms and farmers markets. Mad River Distillers makes whiskey, rum and brandy in Warren and has tasting rooms in Waitsfield, Stowe and Burlington.
“A decline in Canadian visitors this summer would directly impact our bottom line,” Buttenheim said.
The Canadian action against U.S. liquor makers is varied and far-reaching. On March 10, the province of British Columbia banned the sale of all U.S. alcohol products, including beer and wine, at government stores, the Canadian Broadcasting Corporation, or CBC, reported.
Privately owned stores, meanwhile, were left to decide on their own whether to stock American products, according to the CBC. Nova Scotia took similar action.
Lost Lantern, a whiskey blender based in Vergennes, has sold alcohol over the years in Alberta, which has a simpler authorization process than some of the other provinces, according to the company’s cofounder, Nora Ganley-Roper. But she thinks it might be a while before Lost Lantern’s premium blends are back on the shelves north of the border.
“We were planning to do additional releases into Canada this year, and it is less likely that will happen” amid the current uncertainty, Ganley-Roper said. “Our importer is less likely to want to take on product, or commit to buying product, with the uncertainty they have when it comes to any retaliatory tariffs.”
At Caledonia Spirits, which employs 70 people, Christiansen is trying to figure out what to do with the Barr Hill gin he labeled in French and prepped for shipment to Montréal. Under the byzantine rules that govern his industry, he can’t just sell the stock locally as is. One option is to empty the bottles and repackage the gin, but that could be too time-consuming to pay off, he said.
The French-language labels are difficult to remove, and he doubted that applying new labels over the old ones would be an effective use of staff time.
“Our goal is to keep it in those bottles, and we’re researching the compliance rules,” he said.
If the company has to repackage it, “I’d say with about 90 percent certainty we’re not going to recoup the cost.”
Christiansen doesn’t expect the trade turmoil to cause permanent harm to his business, but he’s frustrated over the impact it’s having on his industry, which traditionally has tight margins. Alcohol consumption is on a downward trajectory in the U.S., and that is spurring producers to hunt for new markets. Christiansen said he’s spent years working to build relationships within the hospitality community in Montréal, his company’s fastest-growing market.
“I’m not sure the president understands what this means for Vermont businesses, when he locks up the border,” Christiansen said.
Still, given the small number of Vermont distilleries that export to Canada, the overall financial impact of tariffs on the state’s liquor industry is limited.
Lindsay Kurrle, secretary of the Vermont Agency of Commerce and Community Development, said last week that she had reached out to Canada’s consul general in Boston to explore how Vermont officials might resolve the tit-for-tat tariff issue with Québec Premier François Legault.
“Our goal is to try to find out what does Premier Legault need to see from us to get Vermont products back on the shelves?” Kurrle said. “We want to keep [their] products on the shelves, and we’re going to ask them to do the same.”
The original print version of this article was headlined “Canada’s Call | The country’s response to tariff threats is hurting Vermont distillers”
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This article appears in Mar 19-25, 2025.
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