Minnesota distillery alarmed by now-delayed Canadian tariffs, retaliatory measures
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When American liquors were pulled off Canadian shelves this weekend, Minnesota’s Phillips Distilling Company braced for the worst.
The purging of American drinks followed the announcement from President Donald Trump’s administration that a 25 percent tariff on Canadian goods would strike Tuesday. In retaliation, American alcohol was pulled from the shelves in some Canadian provinces.
As of Wednesday, the tariffs have been delayed for a month so the two countries can negotiate an economic deal.
In the meantime, Phillips Distilling Company is preparing for the possibility that it will lose Canadian business.
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The Princeton-based company exports about 5 percent of its products, including vodkas, brandies and liqueurs, to Canada. There, the company’s Butter Ripple Schnapps is used in a drink named after American actor Burt Reynolds.
“There was a period of time there where if you went to Canada and walked into a bar and used two of your fingers to fake a mustache, they’d know you wanted a Burt Reynolds,” said Phillips Distillery’s CEO Andy England.
Canada is an important part of the distillery’s business. It has distribution offices on the other side of the border. The company doesn’t just export schnapps, it imports barrels of aging Canadian whiskey it uses as an ingredient.
“If the Canadian business materially disappeared, it would hurt us a lot for a couple of years,” England said.
If the liquor bans return full-force next month, England said, at the very least, he wouldn’t be able to make his budget for the year. If business with Canada is halted for 10 years, England said his company could go under.
If they had more time, England said a possible solution would be moving some manufacturing capabilities across the border.
“Best case scenario, we’d be up and running in a year and it probably wouldn’t be with all of our products,” England said. “It would be painful, that's for sure.”
If the tariffs return, England sees a glimmer of hope. While the Liquor Control Board of Ontario banned all American liquor, British Columbia only banned liquor from states with majority Republican voters.
“So, without bringing personal politics into it, the fact that Minnesota’s a blue state gave us a short sigh of relief,” England said.
The tariffs were delayed after Trump and Canadian Prime Minister Justin Trudeau had a phone call. Trudeau later wrote in a social media post that Canada would ramp up its border security. For now, Butter Ripple Schnapps is still safely for sale on Canadian shelves.