British Columbia’s liquor laws were overhauled by the former Liberal government, generating innumerable merry announcements – stretched out over many months –about convenient, common-sense and consumer-friendly changes to the province’s archaic booze regulations.
The populist measures included Sunday opening of government liquor stores and “happy hour” sales in bars. One of the splashiest reforms promised consumers would finally be able to grab a bottle of wine off the shelf with their groceries – all the while helping grow B.C.’s wine sector, because only B.C. wine would be allowed on grocery shelves. Justice Minister Suzanne Anton called the announcement “a very exciting moment in B.C. history.”
But the new policy revived a lingering dispute between Canada and its major trading partners over the country’s rules on wine sales.
Last week, the United States escalated a trade dispute, claiming that the exclusive sale of B.C. wines in grocery stores was harmful to its California wine industry.
This was entirely predictable – virtually every major wine-producing country signed a joint letter to the province in 2016 to protest. Next, Barack Obama’s administration launched a complaint to the World Trade Organization (WTO) in 2017. Australia, New Zealand, Chile, Argentina and the European Union have all piled on with similar complaints. Australia has widened the scope, saying that several Canadian provinces are breaching trade rules with protectionist liquor regulations. Last week’s move by Donald Trump’s administration, asking the WTO to appoint a dispute-resolution panel, ensures the conflict moves forward.
John Clerides, the pioneer of private wine stores in B.C., saw this coming. “I told Suzanne Anton, this is offside with international trade treaties. Everybody told her, ‘You can’t discriminate like this.’”
The Liberals went ahead anyway and three years ago the rules changed so that grocery stores were allowed to stock B.C. wine.
In doing so, they have exposed wine industries across the country to trade retaliation in the name of convenience. Yet, there are just 27 grocery stores across the province that have opted to put B.C. wines on their shelves. Historic or not, the opportunity to grab some wine for dinner along with groceries hasn’t been widely enjoyed by consumers.
The BC NDP government now has a dilemma: Do they fight the trade battle or acquiesce and open up sales to wines from competing jurisdictions?
Bruce Ralston, the minister responsible for trade, said no decision has been made.
“It’s the policy that is in place right now,” he said in an interview. It is a policy, indisputably, but he would not say if it is one worth defending.
The policy “certainly is good for B.C. wine industry and we support the B.C. wine industry,” he said.
But, he added: “I don’t think trade disputes are generally advantageous either for business or for consumers. We’ll work with Canada on this file ...The uncertainty is bad for everyone.”
The federal government must take the lead on the WTO challenge, but Canada already has its arms full fighting Mr. Trump’s protectionist administration on free trade. This particular fight could easily have been avoided.
Last November, the NDP government commissioned Mark Hicken, a long-time wine-industry lawyer, to review provincial liquor rules. His report has been delivered to Attorney-General David Eby, who is expected to release the findings in the next few weeks.
That report could provide B.C. a way out, if Mr. Hicken concludes that the policy around grocery-store sales is flawed.
Mr. Clerides opened Marquis Wine Cellars in Vancouver in 1986 and he’s had to keep his elbows up in a province where the government jealously keeps a tight rein on liquor distribution – and liquor revenue.
He said there is no easy solution to end this trade dispute. The decision to sell only B.C. wine in grocery stores is intertwined with a complex set of rules that govern who can sell what product where and when. Not only is the government greatly dependent on liquor revenues, it also wants to protect the B.C. wine industry, which contributes $2.8-billion annually to the economy, according to the BC Wine Institute.
“The Liberals created this mess,” Mr. Clerides said. His advice to the NDP government now is to let the province’s successful wine industry, which has earned international recognition, compete on its merits. “They have to compete globally. The easiest solution is to take the barriers down.”