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Australia accuses Canada of discriminating against imported wines
Australia has filed an official complaint with the World Trade Organisation (WTO) accusing Canada of placing “discriminatory” rules on the sales of imported wine.
This week the WTO confirmed it had received a complaint from the delegation of Australia that criticises Canada for unfairly restricting sales of imported wines.
It claims Canada’s regulations on wine sales, which are controlled by government-led liquor boards within each province, unfairly disadvantage wines imported from overseas.
The complaint states: “Australia claims that a range of distribution, licensing and sales measures such as product mark-ups, market access and listing policies, as well as duties and taxes on wine applied at the federal and provincial level, appear to discriminate against imported wine, in violation of the WTO’s General Agreement on Tariffs and Trade (GATT) 1994.”
Like the US, Australia is opposed to rules in the province of British Columbia, where local wines can be sold in grocery shops but imported wine must be sold in a “store within a store”.
“The BC wine measures provide advantages to BC wine through the granting of exclusive access to a retail channel of selling wine on grocery store shelves,” the complaint states. “The BC measures appear to discriminate on their face against imported wine by allowing only BC wine to be sold on regular grocery store shelves while imported wine may be sold in grocery stores only through a so-called “store within a store.”
“The BC wine measures also provide advantages to BC wine through a separate distribution system for imported wine and another system that applies to BC wine. Imported wine is subject to a wide range of mark-ups, fees and taxes, while BC wineries are permitted to “direct deliver”wine to consumers. This system provides a substantial benefit to BC wines.”
In Ontario, Quebec and Nova Scotia, Australia has accused Canada of penalising imported wines through higher price mark-ups and various other barriers to sale.
The complaint goes on to state: “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. The Quebec wine measures provide Quebec small-scale wine producers with direct access to grocery and convenience stores.
“The Quebec measures appear to streamline access in favour of Canadian wine, while maintaining barriers to access for imported wines. The Nova Scotia wine measures provide reduced product mark-up for local producers and preferences through supplier competitions and price bands.”
Australia has requested WTO consultations with Canada over the sale of wine. If the issue is not settled within 60 days, Australia could ask for an adjudication by the WTO.
Big surprise – the only reason Canadians buy most Canadian wines, outside of national pride or xenophobia, is because the government has given them a wildly unfair price advantage over imports through various methods like those listed here. But Australia should talk – ever see how much European wine (and any European foodstuff) costs down there? ONG. So, pot, meet kettle.
Perhaps a better scenario would be parity in sales volumes ?
Their real competition lies in imports from other countries producing similar wines – generally at lower cost.