Without hesitation, the response of Canada’s provincial governments to the US tariffs has been to stop the sale of all US liquor products, including wine. On March 4th, the government of Ontario directed the Liquor Control Board of Ontario (LCBO) to cease buying all US alcoholic and non-alcoholic beverages, with all products immediately removed from the shelves of LCBO retail and convenience stores, as well as its website and app. Wholesale customers, including grocery stores, bars, restaurants and other retailers were also barred from ordering US products. Other provinces followed suit, emptying shelves of American products in government-run liquor stores.
Province by province
While the British Columbia Liquor Distribution Branch (BCLDB) halted both the importation and the retail sales of all US-made (including US territories) liquor products in the 197 government-owned BCLIQUOR (BCL) stores, these products remain available for purchase through its wholesale distribution channel, to private liquor stores, bars and restaurants, until the existing inventory is depleted.
In Alberta, the only province with a fully privatised liquor wholesale and retail model, albeit with warehousing and distribution still managed by Alberta Gaming, Liquor and Cannabis (AGLC), the initial response was to remove US products from sale at the central warehouse, and place a ban on all further imports. Given the cost burden to the agencies for the landed cost of the wines, the decision was soon reversed to allow for the sale of all existing US products in the warehouse to licensees, but maintaining the ban on new imports.
While it may be too early to assess how these legislative measures will influence long-term trends, there is no doubt that Canadians have made a concerted effort to boycott American and instead buy local wines.
“Canadian winemaking has made remarkable strides over the past few decades, earning international recognition and awards for distinctive and high-quality wines,” said John Boynton, President and CEO of Arterra Wines Canada. “Our wines can compete with cold-climate varietals from the US and internationally, and now is the moment where search and discovery will show consumers the quality and skill of Canadian wines, winemakers and grape growers.”
As the importer of record in Ontario, the LCBO purchases C$965m ($690m) of US alcohol products annually. The LCBO has replaced US wine with suitable alternatives including Ontario and Canadian-made wines. Since the removal of US products, the LCBO is seeing some shifts in buying behaviour:
- Ontarians are increasingly committed to buying local and Canadian products. Amidst renewed interest and demand for these products, Vintners Quality Alliance (VQA) wine, made from 100% Ontario-grown grapes, has seen a 62% growth, with VQA reds and whites are seeing growth of 71% and 67% respectively. VQA sparkling wine grew by 28%.
- Other Ontario-made wine categories such as International-Domestic Blends are experiencing modest growth (1.6%), while Canadian wine, including B.C. VQA wines, has experienced strong growth (18%) in response to demand.
- Outside of Canada, both Australian and New Zealand wine are experiencing a bump in sales. From Europe, we are seeing increased interest and growth in Italy, Spain and Greece compared to last year.
As a response to the removal of US wines, BCL stores have been adding domestic B.C. wines and imported wines exclusive to BCL to empty shelves. The latest Fiscal Year 2024/25 Q4 (January 1 – March 31, 2025) Liquor Market Review from the BCLDB only included approximately three weeks of sales data once US wines were pulled from BCL stores, but remained available for ordering and sale by private retailers and hospitality establishments:
- 2024 net wine sales totalled C$1.09 bn, with US wines accounting for C$127m.
- Local B.C. wines represent over 45% of total sales in terms of value and over 50% in terms of volume, which was up slightly from Q3, but similar to the same quarter the previous year.
- US wine sales plummeted, from C$40m in Q3 down to C$20m in Q4.
- Countries that saw noticeable gains year-on-year, and in particular over the previous quarter, were Spain, Australia, Argentina and Greece.
- Canadian ice wine from outside of BC also saw significant growth of almost 15%.
Internal trade barriers
The availability of Canadian wines varies dramatically within each province, but is generally split east and west, with fewer wines from Ontario making their way to the western provinces and vice versa for wines from B.C. to the east. Similarly, much smaller production of wine in Quebec and Nova Scotia means that those wines have limited distribution. With provincial government-run liquor monopolies still controlling most of the country, in one form or another, there have always been tensions around the topic of direct-to-consumer (DTC) sales of wine.
While there has been modernisation within some aspects of the liquor control boards, with an increase in the number of privately owned stores, and expansion of the alcohol marketplace into convenience and retail, the wholesale and distribution remains in the hands of the monopolies, for the most part, and this is unlikely to change anytime soon.
Many provincial governments still have regulations in place that prohibit wineries from shipping to consumers in other provinces. There have certainly been many wineries who paid no heed to these restrictions and have built up strong wine club sales over the years based on the DTC model. In 2012, B.C. became one of the first jurisdictions in Canada to allow DTC sales from wineries in other provinces, so long as the wine is 100% grown and produced in the province it is being shipped from.
And so, it was surprising to many when an inter-provincial trade dispute over DTC wine sales broke out last year between B.C. and Alberta. After a heated first half of 2024, the two provinces finally reached a reciprocity agreement to allow wineries to sell their products directly to consumers. Starting in December 2024, B.C. wineries could apply for approval to the DTC program in Alberta, which includes submitting monthly shipping tracking reports and paying the associated handling fees, taxes and liquor markups to the AGLC.
“As of May 9, 2025,” according to Karin Campbell, Communications Manager for the AGLC, “88 B.C. wineries have been approved for DTC sales in Alberta. Another 45 wineries have requested to join the program and are working though the onboarding process.” Together, these applications account for over one third of B.C. wineries and is a positive step forward for the industry.
With the advent of US tariffs and a consumer desire to support Canadian-made wines, it seems like a perfect time for the provinces and territories to work together to finally break down these internal barriers. And while there have been increased calls for change and early reports that an agreement is in the works between most of the provinces, no definitive progress seems to have been made.
In response to an email inquiry, the BCLDB stated that, “In light of the ongoing threat of US tariffs, the province is working on reducing trade barriers within Canada and strengthening our interprovincial trade relationships. For the preliminary stage of this work, the LDB is engaging in discussions with the federal and provincial and territorial governments across Canada about reducing trade barriers, including direct-to-consumer (DTC) sales of liquor. This collaborative, cross-jurisdictional work is in its early stages and details will be made available as they are confirmed.”
The LCBO Press Office echoed this response, noting that there are several provincial bill amendments in the works, which will enable the Minister of Finance, “to direct the LCBO to implement a framework to facilitate the sale of liquor from a manufacturer in one province or territory to a consumer in another province or territory”. This is still in the early stages and there are no updates to share.
The “Buy Local” and “Buy Canadian” movement is allowing consumers to discover new local wines. Increased access to these wines through DTC sales channels will only increase the lasting impact of this movement, so time is of the essence to make significant inroads.
