The cross-border beer war of 1992

The trade dispute that had been brewing for months escalated into an "open brawl" as Canada and the U.S. each took retaliatory measures on beer exports.

U.S.-Canada disagreement over beer imports had been brewing for months

The 1992 cross-border beer war

29 years ago
The U.S. and Canada each take retaliatory measures in an escalating dispute over the export of each country's beer. 2:57

The dispute had been brewing for months. And it finally escalated into an "open brawl." 

"Trade relations between Canada and the United States have taken another beating," said Knowlton Nash, host of CBC's The National, at the top of the night's broadcast on July 24, 1992. 

The blows in this particular conflict took the form of taxes that each country levied on imports of the other's beer.

And they landed on the eve of more negotiations on a North American Free Trade Agreement.

A case cost more 

Ottawa's Lone Star Cafe was an Ottawa bar that sold the American beer brand of the same name. (The National/CBC Archives)

At an Ottawa bar that had "built part of its reputation" on serving an American brew called Lone Star, there was about two weeks' worth of it stacked up in back.

After it ran out, it was going to cost more to serve Lone Star and other American beer thanks to new duties.

New duties were also going to affect Ontario beer exported to the U.S.

"A case of 24 will cost $3 more," explained the CBC's Keith Boag.

But even if the measures were equivalent, their effects were not going to be.

"The U.S. market is much more important for Canadian companies than the Canadian market is for U.S. brewers," explained Boag.

An on-screen graphic told the story: Canada imported six million cases of American beer worth $30 million every year. Americans consumed 30 million cases of Canadian beer worth $190 million.

'It's unwarranted'

The Americans apparently blamed Ontario Premier Bob Rae for starting the dispute with an "environmental tax" on beer that was sold in cans. (The National/CBC Archives)

John Barnett of Molson U.S. warned there could be layoffs if demand "dried up" as a result of the duty.    

 Boag said the Americans were blaming Ontario Premier Bob Rae for inciting tensions by levying an "environmental tax" on beer in cans. That was how most American beer was sold in Canada.

Canadian Trade Minister Michael Wilson didn't support Ontario's move, but Boag said he was "going to bat" for the province because the Americans were violating rules for settling trade disputes.

"It's unilateral. It's unwarranted," said Wilson. 

It was inconvenient, too. Wilson was about to head to Mexico for negotiations on the new North American Free Trade Agreement   

"To say that their timing is bad is a significant understatement," said Prime Minister Brian Mulroney.

It was all "probably going to end with an agreement sometime," said Boag, with a caveat. 

"The real fear is that the border may actually be closed to any beer traffic at all," he said.

Reporter Keith Boag said the Americans were hinting at a "counter-counter retaliation" by late afternoon on the day the beer dispute escalated. (The National/CBC Archives)