STZ, BF.B, DEO: U.S. Wine Industry Is in ‘Crisis’ as Exports to Canada and China Collapse

U.S. wine exports to Canada fell 93% in April, the biggest decline in more than 20 years, as Canadian provinces pull American alcohol from their store shelves in response to tariffs.

The April decline marked the largest drop in wine exports from the U.S. to Canada since 2002, according to data from the U.S. Census Bureau. The steep plunge is a major blow to one of the most important foreign markets for American wine producers and bad news for alcohol companies such as Constellation Brands (STZ), Brown-Forman (BF.B) and Diageo (DEO).

The American Association of Wine Economists issued a statement saying “wine is in a crisis” with too much being produced in California and other areas of the U.S. while demand falls. The sharp drop came after several Canadian provinces imposed bans on American wine and spirits following America’s decision to raise tariffs by 25% on Canadian goods.

China Impacts

The response included sweeping removals of U.S. alcohol from wine and liquor stores. In Ontario, Canada’s most populous province with nearly 40% of the country’s population, the Liquor Control Board removed all U.S. wine and spirits from its 677 outlets. The board typically imports about $1 billion worth of American alcohol annually.

The situation is particularly bad as Canada was the largest international buyer of U.S. wine in 2024, accounting for roughly one-third of total U.S. wine exports. Other major U.S. wine markets also showed weakness in April. Exports to China fell 30.5% year-over-year to $4.54 million. Analysts say that ongoing tariff uncertainty continues to weigh on the wine industry.

Is BF.B Stock a Buy?

The stock of Brown-Forman has a consensus Hold rating among 13 Wall Street analysts. That rating is based on three Buy, eight Hold, and two Sell recommendations issued in the last three months. The average BF.B price target of $33.05 implies 26.87% upside from current levels.

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