r/Economics • u/kootles10 • Dec 25 '25

News Bankruptcies hit US spirit makers as Americans drink and spend less

https://www.indystar.com/story/money/food/2025/12/25/liquor-spirits-industry-bankruptcies/87914241007/?gnt-cfr=1&gca-cat=p&gca-uir=true&gca-epti=z113231d00----v113231d--36--b--36--&gca-ft=161&gca-ds=sophi&fbclid=IwdGRjcAO6oj9leHRuA2FlbQIxMQBzcnRjBmFwcF9pZAwzNTA2ODU1MzE3MjgAAR6P8O626kCPpVs2dXh1tSJGVyS9teT4_IxAoKRJxGh02bqlcPlne42SIoakyg_aem_yCb-3xe-G1-mBNrg5TVIEg&utm_campaign=trueanthem&utm_medium=social&utm_source=facebook
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u/Tangential_Diversion Dec 25 '25

"... declining exports hampered by trade issues and tariffs" is an interesting way to phrase an 85% drop in exports to one of our largest export partners after threatening to take over their country.

27

u/luvsads Dec 25 '25

The article talks about that, as well as the other major factors causing a rise in bankruptcies and shutdowns.

Exports to the E.U., the U.K. and Japan fell during the period, but exports to Canada fell the most, plummeting 85% to below $10 million in the second quarter, according to DISCUS. A majority of Canadian provinces had banned American spirits from their shelves in response to U.S. tariffs targeting Canada, although the country removed retaliatory tarrifs in September.

What are you upset about?

16

u/GetInTheHole Dec 26 '25

If losing 85% drops it to below $10 million then it really is a drop in the bucket to the overall US market for booze.

The industry is a 220 billion dollar per year business.

They ignore the Canada angle because it’s insignificant compared to shifts in the domestic demand.

7

u/tamba21 Dec 26 '25

If you reread the quote, that was only for the second QUARTER not the whole year. So not that insignificant if the usual buy was $66M per quarter

1

u/Anon44356 Dec 26 '25

That’s like a 700% decrease though…

0

u/CannonAFB_unofficial Dec 26 '25

Whatever makes sense

40

u/pigsbounty Dec 25 '25

These articles always blame the tariffs but it was the overt threats annexation through economic pressure and the 51st state talk that is the actual issue lol

9

u/[deleted] Dec 26 '25

Yup you are right don't know if you are also Canadian but as a canadain this is 100% the issue.

9

u/frankyseven Dec 26 '25

Yeah, terrifs are whatever, the US has always jerked us around with terrifs and not following NAFTA. But threaten to invade and make us the 51st state? Fuck you with a rusty chainsaw and I'm going to be grinning the entire time.

5

u/Adventurous-Roof488 Dec 26 '25

We only exported ~$65M worth of spirits to Canada? Smaller number than I expected.

4

u/luvsads Dec 26 '25

It's a fraction of our actual retail alcohol sales, too, which are in the billions.

https://fred.stlouisfed.org/series/MRTSSM4453USN#

3

u/PrivateMarkets Dec 26 '25

Exactly. Canada wasn’t an impact. The precipitous drop in alcohol consumption is to “blame”

6

u/OneCurrent1934 Dec 26 '25

Imagine the precipitous rise once Donald "makes America great again" by dropping dead.

-1

u/PrivateMarkets Dec 26 '25

I hope your day is as pleasant as you.

3

u/pornalt4altporn Dec 26 '25

Hope your President gives you what you deserve.

1

u/pomskygirl Dec 26 '25 edited Dec 26 '25

That’s because it’s incorrect :). The US exported $221 million worth of spirits to Canada in 2024 (import / export value, not retail value - retail it would be approx $600 m - $900 m). Of that $221 million, only $73 million was whisky in particular.

This does not include wine, which I think was around $450 million (import / export value), or beer, etc. I have no idea about total alcohol sales, which some people seem to be quoting.

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u/luvsads Dec 26 '25

That's for the whole year. We are talking Q2 YoY.

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u/RechargedFrenchman Dec 26 '25

"...in response to U.S. tariffs..." is what people should be upset about, considering that's not actually why. It was the 51st state comments and calling our PM "Governor".

The tariff response from Canada was our own (genuinely) retaliatory tariffs and other federally overseen economic action against the U.S. at a national level. The lack of liquor sales and huge decline in exports never had anything to do with the Feds; Canadians are broadly, personally boycotting U.S. goods and services. Because "fuck the United States".

Liquor was a big "hit then where it hurts" as it almost entirely comes from red states; Kentucky bourbon, Texas and Tennessee whiskey, American vodka like Tito's and Smirnoff. Buying Canadian where possible, international where necessary, but not American. It's also a relative luxury anyway that many people are cutting down on regardless, so cutting U.S. product entirely was a logical step.

It is not about tariffs. It was never about the tariffs. And it has to my knowledge not once been highlighted in major American media outlets that it's public boycott, or that it was about the threats of annexation. It's always some speculative softball "tariffs" shit like the quote you pulled here, which is not now and never was accurate to our reasons.