Canadian Wine in Geneva, again

We now have a second WTO partner expressing concerns about provincial wine regulations (cough, monopolies) here in Canada. This time it is Australia.

The Ozzies have now filed a complaint with the World Trade Organization against Canada. Canberra’s lawyers and diplomats claim our provincial rules unfairly discriminate against sales of imported wine.

According to Australian trade minister Steve Ciobo:

“Australia’s seeing its market share, in that market, erode. That concerns me, it concerns wine exporters, potentially this could cost Australian jobs; we know the direct connection between exports and Australian jobs.”

BC ‘Store Within a Store’

In one respect, Australia’s Request for Consultation at the WTO is similar to an on-going consultation brought by the United States. The US under Obama and Trump has accused Canada of placing unfair limits on the sale of imported wine.

Canada is an important market for Australia’s wine-industry. Just like the concerns of the American wine-industry, the Ozzies are upset about 2015 reforms in BC. These reforms allowed grocery stores to sell wine produced locally, i.e. in BC. However, these same grocery stores can only sell imported wine through a “store within a store” with a separate cash register.

Ontario on the Table

Furthermore, Australia’s Request for Consultations makes reference to not just BC but also provincial measures in  Ontario, Quebec and (even!) Nova Scotia. As regards Ontario, it states as follows:

“The Ontario wine measures place conditions on both the sale of wine in grocery stores and its supply through the Liquor Control Board of Ontario (LCBO), a State Trading Enterprise. The Ontario measures appear to operate so as to favour products of Canadian origin and potentially exclude or limit imported products from being displayed and sold. It appears that the Ontario wine measures advantage Ontario wine by allowing Ontario wineries to directly deliver wines to licensed establishments in Ontario, on behalf of the LCBO.”

Under WTO rules, Canada has 60 days to consult, i.e. negotiate, with Australia. After that, the Ozzies could start a formal dispute whereby a three member panel will be established. Ultimately, Canada could being forced to change these laws or risk retaliation.