Canadian Distillers Pivot to European Markets Amid Emerging US Trade Sanctions
As Canada looks to strengthen trade ties with the European Union amid its ongoing trade dispute with the United States, some small businesses are also looking overseas for new markets.
SFR Distillery in Ottawa had planned to expand into the U.S. market, but that strategy has been upended by new measures from Washington that will ban imports of certain Canadian products.
“As of Tuesday, it will actually be illegal for us to export our goods to the United States because of the decisions they’ve made down there,” said Adam Brierley, SFR Distillery’s general manager and master distiller.
Until recently, expanding south of the border was part of the distillery’s growth strategy.
Its flagship whiskey was developed as a bourbon alternative and was put on LCBO shelves as bourbon was removed from Ontario stores.
“Our flagship whiskey was intended as a bourbon replacement,” Brierley said.
After recent domestic growth, the company had planned to make a major push into the U.S. market. Now, Brierley is looking to Europe instead.
The distillery plans to attend several large European trade shows throughout the year, where Brierley hopes to meet with distributors and importers.
“Hopefully we can send out whole sea containers of whiskey over to Europe all at once,” he said.
While some businesses may be able to diversify their markets, others could face significant challenges from Washington’s latest measures.
International trade lawyer Barry Appleton said the import ban represents a major escalation, particularly for businesses operating in the affected sectors.
“This is a major escalation (to a) small percentage of our economy, (but a) big impact if you’re in one of those sectors,” Appleton said.
The U.S. import ban, set to take effect Tuesday, covers a list of Canadian products, including beer and other alcohol, whey protein, molasses and motorcycles.
Appleton said an import ban presents a particularly difficult barrier for Canadian companies.
“With an import ban you’re talking about a wall, and a wall is a lot more difficult to be able to circumvent,” he said.
Canadian brewers are among those facing yet another challenge as they too, prepare to be shutout of the U.S. market.
The industry has already been dealing with higher costs for aluminum cans, adding further pressure to producers.
“That has been a huge, huge increase in cost and brewers have been working very, very hard to try to absorb those costs, but there’s no end in sight,” said Richard Alexander, president of Beer Canada.
For Brierley and SFR Distillery, however, the shift toward Europe offers another potential path for growth.
“It’s nice to know there’s another larger customer, as big as the United States, that would be very happy to take our goods,” he said.
This article was first reported by CTV News
