Statistics Canada has reported a 5.1% decline in Canadian spirits exports last year compared with 2016.

Despite a fall from C$674.7m ($537.7m) in 2016 to C$639.9m ($510m) in 2017, spirits exports accounted for 68% of the value of all Canadian beverage alcohol exports last year, exceeding the combined value of beer, cider and wine exports.

“The hike in taxes in our home market has already begun to further erode the competitiveness of Canadian Spirits manufacturers.”

According to Canadian spirits producers’ national trade association Spirits Canada, the decline was influenced by a tax rise on Canadian Whisky and other Canadian alcohol products last year.

Spirits Canada president and CEO Jan Westcott said: “The March 2017 Federal Budget that increased Canadian liquor excise duties immediately by 2% to 7.8% on Canadian Whisky and other Canadian alcohol products, with automatic annual increases every year thereafter, had a negative impact as manufacturers and brand owners sought to reduce costs and throttled back on their investments domestically and internationally.”

Canadian Whisky made up C$365m ($290.9m) of the total value of Canadian Spirits exports, followed by liqueurs at C$155m ($123.5m). Vodka, gin, rum and grain-neutral spirits accounted for the remaining.

Westcott further stated: “While Canadian excise duties are not charged on products exported outside of Canada, the hike in taxes in our home market has already begun to further erode the competitiveness of Canadian Spirits manufacturers, a decline we fear that will only accelerate in 2018 with the cut in Spirits excise duties by the US earlier this year.”