U.S. challenges program that puts B.C.-only wines in grocery stores
The Obama administration has launched a trade enforcement action against Canada at the World Trade Organization, stating that B.C.'s liquor regulations discriminate against the sale of U.S. wine.
In April 2015, the province introduced legislationallowing the sale of some B.C. wines in designated grocery stores.
Wine produced out-of-province must be sold in a private or provincial liquor store.
U.S. Trade representative Michael Froman wrote in a news release the regulations breach Canada's WTO commitments by giving local B.C. wine an unfair advantage.
"The discriminatory regulations implemented by British Columbia intentionally undermine free and fair competition and appear to breach Canada's commitments as a WTO member. Canada and all Canadian provinces, including BC, must play by the rules," Froman said.
There are currently 14 grocery stores across the province that exclusively sell wine produced in B.C.
A total of 671 private liquor stores and more than 200 provincial liquor stores sell wine imported from across Canada and around the world.
B.C. defends policy
Jobs Minister Shirley Bond said in a statement that the province will defend B.C.'s current wine policy against the challenge.
"The B.C. government is confident that we are complying with B.C.'s and Canada's international trade obligations, she said. "We will continue to work closely with Global Affairs Canada (GAC) to ensure that B.C.'s liquor policies fall within these trade obligations."
She said that Canada's current obligations allow for flexibility in how local wines are distributed.
"Trade agreements such as NAFTA allow for a number of private wine outlets that sell only B.C. wine, and we are confident in the approach we have taken," she said.
The Wine Institute, an advocacy group representing over 1,000 Californian wineries, backed the U.S. government's challenge.
"We urge the WTO and the governments involved to reach a fair and equitable solution, so that B.C. grocery store consumers can choose from the vast array of the world's great wines," Wine Institute CEO and president Robert Koch said Wednesday.
"B.C. consumers are among the most knowledgeable and sophisticated purchasers of wine. Any expansion of retail distribution channels should ensure that consumers have convenient access to their preferred wines from around the world."
The U.S. has launched 26 enforcement complaints at the WTO since 2009 and has won all of those that have been decided.
