Wine Culture Magazine

Wine has such a romantic image, it’s sometimes easy to forget that it’s also a business, and a serious one at that.

Not in 2018, though.

This year, two major free-trade issues have had enormous potential to affect—for good or ill—what we drink and how much we pay for it.

First, there was the interprovincial trade case known as Comeau. In October 2012, a New Brunswick man named Gerard Comeau attempted to transport a few cases of beer across the border from Quebec, in contravention of the New Brunswick Liquor Control Act. After police nabbed him (and his beer), the New Brunswick Provincial Court determined that the law was a trade barrier violating section 121 of the Constitution Act of 1867, sending the case to the Supreme Court of Canada.

Much to the disappointment of consumers, winemakers and merchants alike, on April 19 the Supreme Court decided against Comeau, determining that that Section 121 does not impose absolute free trade across Canada. In other words, it slammed the door on direct-to-consumer purchases of wine across Canada, making it easier to buy a Pinot Noir from, say, Tasmania than one from Prince Edward County.

“Every wine-producing nation in the world has direct sales within its own country,” said a disappointed Tony Stewart, proprietor & CEO of Quails’ Gate Winery. “Canada needs to correct this so that we can start to create a level playing field with the rest of the world.”

And then there’s NAFTA, the North American Free Trade Agreement, which has swept up dairy, softwood lumber, car manufacturing and wine in its uneasy wake. As the fractious negotiations continue, wine is still at issue.

Earlier this year, the U.S. requested a World Trade Organization dispute settlement panel following a complaint lodged in September 2017. It is over what it perceives as B.C.’s unfair rules regarding wine sales in the province’s grocery stores, which only permit 100 per cent B.C. wine on shelves.

“While not surprised given the current stall in NAFTA negotiations and the U.S.’s earlier WTO complaint against B.C. practices, we remain puzzled how they have been harmed as the U.S. has a wine trade surplus of $450.6 million,” said Miles Prodan, president and CEO of the BC Wine Institute. “Still, we need to take their concerns seriously and we have been proactive in working with all levels of government to address the concerns of this, and other trade issues.”

Discussions continue. Meanwhile, it’s enough to drive a wine lover to drink.

Canada and U.S. wine by the numbers

According to the BCWI, wine produced in Canada represents 32 per cent of total sales domestically while imported wine owns 68 per cent of the market. Canada is the U.S.’s second largest wine export market by value, after the European Union.

Since the Canada-U.S. Free Trade Agreement (CUSFTA) was signed in 1988:

• U.S. wine import value to Canada has tripled to 21.4% of total imports.

• U.S. wine sales market share in Canada have doubled to 14.2% (VQA wine is 10%).

• U.S. wine brand listings in Canada have experienced double digit growth over the past 30 years.

• U.S. wines have experienced 13% average annual wine sales value growth in Canada, every year for the past 30 years.

• U.S. bottled wine imports have experienced 10% average annual wine sales value growth in Canada, every year for the past 30 years since the signing of the CUSFTA.

• In B.C., U.S. bottled wine imports rank #1 in value at $60 million, and #1 in volume at 7.5 million litres.

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