U.S. challenges B.C. wine regulations at WTO

Obama administration challenges B.C. government’s restrictions on U.S. wine in grocery strores

B.C. wine may be sold on grocery store shelves if the owner of the store has the appropriate licence | Glen Korstrom

The U.S. government has launched new trade-enforcement action against Canada at the World Trade Organization (WTO), the U.S. government announced January 18.

The action challenges B.C. government regulations that prohibit U.S. wine from being sold on grocery store shelves.

Only B.C. wine may be sold at select B.C. grocery stores in which the owner has a licence – licences that the B.C. has recently been auctioning off for more than $1.15 million apiece.

That restriction breaches Canada’s WTO commitments and hurts U.S. wine producers, according to the U.S. government.

The action is the 26th trade-enforcement challenge that the administration of U.S. President Barack Obama has launched at the WTO. It has won every one of those actions, according to the U.S. government.

“When U.S. wine producers have a fair shot at competing on a level playing field, they can compete and win in markets around the globe,” said U.S. trade representative Michael Froman in a release.

“The discriminatory regulations implemented by B.C. intentionally undermine free and fair competition, and appear to breach Canada’s commitments as a WTO member. Canada and all Canadian provinces, including B.C., must play by the rules.”

Curiously, Coralee Oakes, who is the minister responsible for the British Columbia Liquor Distribution Branch, was not the minister that the B.C. government chose to provide its official response.

Oakes is also the only government minister to not be on any cabinet committee.

“We support the growth of the industry, and we will defend it against this challenge,” said Shirley Bond, who is B.C.’s Minister of Jobs, Tourism and Skills Training.

“The B.C. government is confident that we are complying with B.C.’s and Canada's international trade obligations. We will continue to work closely with Global Affairs Canada (GAC) to ensure that B.C.'s liquor policies fall within these trade obligations, and we will continue to work with GAC through the upcoming consultation process.”

B.C. wine regulations provide two options for licenced grocery store owners to sell wine.

One is the wine-on-shelf option, whereby B.C. wine can be sold on shelves within the grocery store.

The other option is the store-within-a-store model, where there is a sectioned off area of a grocery store where beer, wine and spirits may be sold. U.S. wine may be sold in the store-within-a-store model.