A prominent association representing major American spirits producers is urging the NSLC to eliminate a policy that grants preferential markups to local spirit products in Nova Scotia. The Distilled Spirits Council of the United States submitted a detailed 77-page report to the Office of the United States Trade Representative, highlighting various trade barriers encountered globally.
The report specifically addresses Canada, outlining obstacles such as restrictions on selling American alcohol in most provinces and the favorable markups on domestic spirits in several provinces, including Nova Scotia. In Nova Scotia, spirits produced or processed within the province receive markups ranging from 50 to 80 percent, while imported and non-Nova Scotia spirits face a higher markup rate of 160 percent.
The council contends that these markups violate trade agreements by favoring local products and discriminating against imported spirits. They are seeking assistance from the U.S. government to urge Canada and specific provinces, including Alberta, Nova Scotia, New Brunswick, Prince Edward Island, Saskatchewan, and Newfoundland and Labrador, to eliminate the NSLC policy.
The Intergovernmental Affairs Department of Nova Scotia stated that they have not received any formal complaint regarding this issue through established trade dispute mechanisms. The NSLC defended its policy, emphasizing its mandate to support the local beverage alcohol industry and ensure fair competition for local producers.
The report reflects a challenging period for U.S. spirit exports, with a nine percent decline in global exports during the first two quarters of 2025. The council attributes this downturn to retaliatory tariffs, escalating trade tensions, and market access barriers in key markets. Additionally, international consumers seem to be favoring domestic or other imported spirits due to perceived unfair U.S. trade practices.
The Craft Distillers Association of Nova Scotia declined to comment, stating that the issue is primarily a government-to-government trade matter. They highlighted the positive economic impact of Nova Scotian distilleries, which employ over 100 full-time workers and source a significant amount of local agricultural products annually.
The association expressed hope for the restoration of the longstanding trade relationship between Canada and the U.S., emphasizing the importance of supporting local producers without compromising provincial programs.