Crown Royal Can Avoid New U.S. Ban Through Bulk-Shipping Arrangement

Crown Royal whisky appears positioned to avoid a new US ban on certain Canadian alcoholic beverages because of the way the product crosses the US-Canada border, USA Today reported.

Crown Royal Canadian whisky is distilled and matured in Manitoba before being shipped in bulk to US facilities for bottling and distribution. [Photo:Crown Royal Facebook]

A Sept. 8 White House proclamation bars certain Canadian alcoholic beverages from entering the United States beginning Sept. 29. The order contains an exception for qualifying products transported in containers larger than one gallon.

Crown Royal, which is distilled and matured in Manitoba, Canada, is shipped in bulk containers to US facilities where it is bottled for the American market.

MarketWatch reported that the arrangement allows the whisky to fall outside the restriction as currently written.

The development comes as trade tensions between Washington and Ottawa continue to escalate. The new restrictions cover Canadian alcoholic beverages and other products and are scheduled to take effect Sept. 29.

Diageo, Crown Royal's parent company, also expanded its US operations this year with the opening of a facility in Montgomery, Alabama.

The company said the facility would strengthen its supply network and bring its beverage brands closer to customers in the southern United States.

The bulk-shipping provision does not mean all Canadian alcoholic beverages are exempt. The treatment of individual products depends on the precise terms of the proclamation and how the goods are imported.