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>> Bloomberg Audio Studios. Podcasts,

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>> All right, we're speaking this morning

about the somewhat surprise collapse of

the US Canada trade talks. This

tit-for-tat tariff debate have hit a lot

of American producers hard including

American liquor companies and distillers

who usually sell quite a bit of product

across the northern border.

>> Helping us distill

all of this, I said groaning at my own

comment, we have Michael [laughter]

Felilo, president CEO of the American

Whiskey Association. Michael, great to

have you with us here.

I want to just ask you about the state

of play. We don't have to get into the

granular details here cuz we don't

really know a whole lot about what

happened with with the talks, but what

when you look at the the business that

you represent, what has the last year

plus meant for them not having access as

they had before to the the Canadian

market?

>> Yeah, good morning. Thanks for having

me. Obviously, we didn't get the

breakthrough we were all hoping for this

morning. So for American whiskey

producers, this remains unfinished

business. As you pointed out, for a year

and a half now, American whiskey has all

been basically shut out from most of the

provinces in Canada. And this is

something that affects the entire

American whiskey supply chain. So not

just the distillers, but all the way

down to the coopers and also the the

grain farmers. So obviously, we were

hoping for a breakthrough. We were

hoping for a deal. We were hoping to

regain access to the Canadian market.

Then we were hoping that the provinces

would align with the federal government

and allow us to have access at the

shelves. And we were really looking

forward to reconnecting with our

Canadian consumer. But obviously, that's

not happening.

>> How big of a part of the business is

this that you're losing? Either in a

percentage or a dollar amount. Like how

big of a hunk of what you would usually

sell is not there at the moment?

>> Well, I'll point to the White House

figures that were shared. So in 2024,

when the provincial restrictions went in

effect, you had a market that was about

$203 million.

When you when you measure that from

March of 2024 when it went into effect

in December, when you look at the same

year-over-year comparison, it was down

to 60 million. So, roughly a 70%

decrease in US spirit exports to Canada.

And by the way, American whiskey is

about over a billion-dollar export for

the US economy. So,

at the same time, by the way, American

whiskey and US spirits exports grew by

about 2 and 1/2% everywhere else except

Canada. So, to put things in

perspective,

this this prohibit prohibit American

whiskey on those those shelves really

did have an impact on the category, but

also US spirits in general.

>> Mike, let me just ask you about the

quality of conversation you've been

having, you know, with American

leadership, Canadian leadership all all

through this.

I I imagine, you know, many groups

affected by these tariffs have been

trying to bend the ear of the White

House and the US trade representative

likely trying to do the same thing with

their Canadian counterparts.

How engaged have you been in the

process? What have those conversations

been like?

>> Well, I can say what's really special

about the spirits industry is globally

we are very connected. We see this as

one ecosystem. So, we are all about fair

market access, competition. We want the

world's whiskeys to compete, but we

really do focus on market access and

fair competition. So, as an industry,

we've always been very united and

aligned on what we're looking for

globally in terms of of trade policy.

When we look at the the the Trump

administration and our counterparts in

Canada, we're obviously equally engaged

on both sides, and we were always taking

part in constructive conversations and

and making sure parties were aligned and

the impact

was was known and understood on both

sides. Cuz remember something, the

United States and Canada, we are part of

the same North American hospitality

ecosystem. So, this didn't just have an

impact on the US side, it also impacted

the Canadian side of things. So, again,

the industry always connected, always

sharing information. We were always

focused on market access. Uh and then

for both the US government and the

Canadian government, they've always been

engaged and really, you know, looking at

the the trade officials and the people

who are really doing the hard work

behind the scenes, those lines were

open, communication was flowing. We

received good indications yesterday that

there was progress being made. So,

obviously, to learn about this uh late

last night or early this morning was

really unfortunate.

>> Michael, it seems to me like you have

two problems. You have the actual policy

issue, but then you have a branding

issue now. We had a producer who was

recently in Canada and was telling us

all of the shops are labeling

Canadian-made products, and there is

still this impetus to buy Canadian. Even

if you get these products back on the

shelves, Canadians are really annoyed.

They're very mad. Do you think you have

some work to do on the PR front to try

to convince those folks to buy American

products when they are kind of furious

about how this all went down?

>> Yeah, a really astute observation. So,

essentially, when you're not on a shelf

for a year and a half, right? You're out

of sight, out of mind. So, from a

marketing uh and branding uh uh

scenario, that's not the best place to

be in. Yeah, it's it's one of those

things where, you know, there's a

three-step process that we're really

focused on here. One was gaining market

access to Canada. And obviously, that's

what we were hoping the negotiations

between President Trump and Prime

Minister Carney would result in. Step

two then, because the provinces control

the liquor boards and really the

shelves, we were hoping step two uh

would result in the provincial

authorities to align with the federal

government and give us access to those

shelves. And then step three, which is

the point you just made, is reconnecting

and reuniting with the Canadian

consumer. And that's probably about

50/50 right now. Like, we've heard from

Canadian consumers, a lot of the bourbon

enthusiasts, who were very excited to be

able to go to the stores this morning

and purchase a bottle of American

bourbon or American whiskey in in

general. But then obviously, there's

also a group out there of Canadians who

are really annoyed, disappointed, and

frustrated with the relationship with

the United States. And And that's

understandable as well. So, all we

continue to advocate for is access to

the Canadian market, uh access to the

shelves, and the ability to reunite with

the Canadian consumer. And to your

point, we know it's going to take some

time, but Canadians should have the

choice uh to choose American whiskey.

And we want all American whiskeys to

compete there. But, the fact of the

matter is, we haven't been able to

compete cuz we've been kept out of the

competition altogether.

>> Picking up on this last question,

Christina has been out to Kentucky

recently, done a piece on on the bourbon

industry. I I'm curious what's sort of

the history and symbolism here, and how

you think about it in the context of

this. Look, so many products are subject

to these tariffs now. Why is it you

think that American whiskey's been

singled out in the way in which it has?

Why does it carry such symbolic value or

significance in the context of this

trade war?

>> American whiskey is a quintessential

American product, right? We're

celebrating the America's 250th. We look

at George Washington, not only one of

our, you know, great American president,

but also a great American distiller. And

this is a product that has a long supply

chain, right? Again, it starts with

American farmers who grow American

grain. Then it goes to uh lumber, right?

And coopers, the the the uh the the

industry that makes the barrels. And

then you have the distillers. So, this

is a symbolic American product. When you

look at what American whiskey makes up

in this larger US-Canadian trade deal,

it's it's very minuscule. It's it's it's

not a lot.

>> Mhm.

>> Uh but, the symbology here, right? It

became a symbol of the trade tension. It

became the symbol of the dispute. You

know, there was perfectly good whiskey

being uh poured out into the streets,

which which is a total sin, in my

opinion. So, it became symbolic. It

became a symbol of the trade tension and

the dispute. But, I believe it can

become a symbol of uh reparation, that

we can get back to to normal.

>> All right, Michael, great to speak with

you. And And we're hoping for better

days ahead. That's Michael Balelo of the

American Whiskey Association joining us

here on this Saturday morning.

>> Thank you so much.