When Trade Relations Soured, This American Liquor Maker Moved Production To Canada

For years, Stephanie Intrevado has been an enthusiastic collector of Sour Puss, the brightly coloured fruit-flavoured liqueur that has become a staple among generations of Canadian university students.

From passionfruit and coconut to watermelon and raspberry varieties, the Quebec resident has spent years tracking down rare bottles and branded merchandise. Having first tasted the drink at age 18 – the legal drinking age in Quebec – she never imagined the popular beverage was actually made in the United States.

So when Canadian provinces began removing American-made alcohol from store shelves as part of a broader response to escalating trade tensions with the United States, Intrevado worried her favourite drink might disappear.

What followed was an extraordinary business decision that highlights how trade disputes can reshape supply chains in unexpected ways.

A Costly Consequence Of The Trade War

The provincial boycott of American liquor delivered a major blow to Minnesota-based Phillips Distilling, the family-owned company behind Sour Puss.

According to chief executive Andy England, the company lost approximately 70 percent of its Canadian business after provinces began pulling American alcohol products from government-controlled liquor stores.

The impact was particularly severe because Canada represents the largest market for Sour Puss by a significant margin.

England described the situation as disastrous.

Faced with mounting losses and no immediate resolution to the trade dispute, Phillips Distilling made a decision it had never previously considered—relocating part of its production to Canada.

Manufacturing Moves North

Within weeks of the boycott taking effect, company executives began exploring ways to preserve their Canadian market presence.

By October, Phillips Distilling had reached an agreement with Montreal-based manufacturer Station 22 to begin producing certain products within Canada.

The strategy proved successful.

Because the products were now being manufactured domestically, provincial liquor authorities gradually allowed them back onto store shelves.

England said the move effectively transformed the company’s position in the market.

“We produce and sell in Canada,” he explained, noting that most provinces have since reinstated some of the company’s products.

The return has been welcomed by distributors and consumers alike.

For Intrevado, the reappearance of Sour Puss in Quebec stores was reason enough to celebrate publicly. She marked the occasion on social media with a photo of several bottles and a simple message: “Guess who’s back?”

Why Sour Puss Was Different

Unlike products such as Kentucky bourbon or California wine, whose identities are closely tied to specific geographic regions, Sour Puss does not rely on a protected place of origin.

That flexibility made it easier for Phillips Distilling to relocate production without damaging the brand’s identity.

According to trade experts, the company’s deep dependence on Canadian consumers also reduced the reputational risks that might normally accompany moving production abroad.

In many ways, Sour Puss had already become more Canadian than American in the minds of consumers.

England himself acknowledged that if the company sold 1,000 cases of Sour Puss annually in the United States, he would be surprised, describing it as a brand that Canadians had effectively adopted as their own.

A Political Dispute With Economic Consequences

The liquor boycott emerged after trade relations between Canada and the United States deteriorated following a new round of tariffs imposed by Washington.

Ontario was among the first provinces to remove American alcohol products from stores, citing the impact of U.S. tariffs on key Canadian industries. Other major provinces, including Quebec and British Columbia, soon followed.

Because alcohol distribution in Canada is largely controlled by provincial governments, officials had the authority to quickly restrict sales of American products.

Only Alberta and Saskatchewan, which operate more privatized liquor retail systems, continued selling U.S. alcohol without major restrictions.

The dispute remains unresolved.

While the U.S. government has criticized the provincial liquor bans and raised concerns during trade negotiations, Canadian officials have indicated that restrictions may remain until tariffs affecting key sectors such as automotive manufacturing, metals, and lumber are addressed.

A Lesson In Business Adaptation

Whether or not the trade dispute is eventually resolved, Phillips Distilling has already undergone a significant transformation.

The company’s experience demonstrates how businesses can adapt when geopolitical tensions disrupt traditional markets.

What began as a threat to one of Canada’s favourite liqueurs ultimately resulted in new manufacturing investment north of the border and a reimagined business model for an American company heavily dependent on Canadian consumers.

For Phillips Distilling, the lesson appears clear: when trade barriers emerge, flexibility can become a competitive advantage.

And for loyal Sour Puss fans like Stephanie Intrevado, it means their favourite drink remains available – just with a new Canadian address.