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Food & Wine Supreme Court’s interprovincial-drinking ruling should be a call to action for wine industry

In 2012, retiree Gerard Comeau was caught in a police sting for crossing back into his home province of New Brunswick from Quebec with a trunk full of beer and liquor.

Chris Young

As the dust settles on last month’s Supreme Court of Canada ruling in the Comeau case, at least one thing has become clearer than a well-polished Riedel decanter. If we let esteemed justices do the thinking when it comes to interprovincial drinking, we’ll be living in the 19th century until the sun expands into a Red Giant and vaporizes the Earth (which is to say roughly five million years, give or take).

R v. Comeau, which vaporized what some scholars believed was a constitutional guarantee of free trade between provinces (including the convenience of online shopping for tasty Canadian wine direct from the vineyard), was just the latest legal insult in a century of disappointing, Prohibition-infused court rulings. We should have seen it coming.

So, now the fight begins anew. But this time not in court. Wineries in particular need to pump up the volume at the provincial level and start acting more like badass egg, dairy and poultry farmers, just some of the formidable lobbyists that successfully intervened in the “free the beer” case to back the preposterous cause of overpriced Budweiser. Heck, vintners happen to be farmers, after all. It’s time they showed up on the lawns of provincial legislatures in dung-stained overalls and rubber boots to demand the liberalized liquor retail system that a majority of Canadians want. Optics, people!

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Do I need to repeat the evidence? In 2012, retiree Gerard Comeau was caught in a police sting for crossing back into his home province of New Brunswick from Quebec with a trunk full of Bud Light, Miller, Coors and Molson, plus three bottles of liquor. New Brunswick prohibits the possession of more than 12 pints of beer or one bottle of booze purchased outside its borders, a typical provincial restriction. Initially, a lower court threw out Comeau’s $292 fine, citing Section 121 of the 1867 Constitution stating that articles grown or manufactured in one province must be “admitted free” into another. New Brunswick took the case to the Supreme Court because it feared losing revenue from its stratospheric beer markups. Comeau lost. So did Canada.

In hindsight, you could say the case was doomed from the outset. Since the early days of our Dominion, courts have granted provinces ever-stronger authority over alcohol to do such things as, for example, reap revenue through the licensing of taverns, observes Dan Malleck, associate professor of health sciences at Brock University in St. Catharines, Ont., as well as author of Try to Control Yourself: The Regulation of Public Drinking in Post-Prohibition in Ontario. Malleck, currently working on a book on pre-Prohibition liquor laws, noted that the Supreme Court’s 1921 decision known as Gold Seal had already affirmed that provinces could disallow unfettered movement of liquor over their borders as long as they weren’t charging tariffs or duties to do so. The Comeau case, he told me, while possibly seeming “archaic” to some, “followed a trend of court decisions from the past.”

Joseph Groia, the founder and principal of Groia & Company, a securities litigation law firm, can easily see both sides of the issue. He’s not just a heavy-hitting lawyer and former head of enforcement at the Ontario Securities Commission (Bay Street’s legal watchdog), but with his wife, Susan Barnacal, he runs 16 Mile Cellar, a high-end boutique winery in Niagara.

The Comeau decision, he said, was “well-reasoned” and “the right result as a matter of statutory interpretation and constitutional law.” At the same time, he expressed disappointment that the case came forward on the basis of a man trying to score a deal on “cheap beer” by crossing a provincial border. “I wonder, having read the decision carefully, whether the court would have dealt with it differently if the wine industry had been the issue before them,” he said.

Context is important in such cases, and small- to medium-sized wine producers might have presented a more sympathetic case because of, in Groia’s words, the “almost schizophrenic” way provincial governments have historically approached the wine industry.

“You’ll have aspects of the government trying to encourage agritourism, trying to encourage innovative farming techniques and do all the things that will promote the [wine] industry,” he said. Yet, “when it comes to the sale and delivery and consumption of wine, we have this incredibly 19th-century view of the needs of that marketplace.”

Given that Canadian wine is a tough sell internationally, producers in the wake of Comeau are now left with a narrow band of options. In Ontario, for example, the LCBO dominates the retail sector and runs a highly centralized purchasing system for 660 stores. Many small producers, who may have as few as 50 or 80 cases of a particular wine to sell, have complained to me that they find it hard to compete for shelf space next to Australian, European and Californian megabrands that can ingratiate themselves to LCBO product buyers with promises of mass advertising support, in-store tastings and the like.

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Now that the Supreme Court has basically drawn boundaries around the provinces, Groia says he hopes his own Ontario government (and I would hope other wine-producing provinces as well) will take meaningful steps toward opening up sales channels.

“One obvious thing to do, which we haven’t done in this province and which would make a huge difference, is to allow VQA stores,” he said. In other words: specialty boutiques similar to those in British Columbia that exclusively sell made-in-province wines. Another would be to permit a smattering of private, specialty wine stores catering to enthusiast customers, not unlike some of the private shops in British Columbia that exist in tandem with provincially run BC Liquor Stores. This would enable small producers to find shelf space for, say, four or five cases here and there and give keen consumers better access to exciting products. At all times the government would reap just as much revenue (for hospitals, education, roads and politicians’ generous expense accounts) because it would still monitor and control every drop sold. That last point sadly is lost on countless naive opponents of any form of privatization.

In the meantime, I’d say liquor boards could do a very basic and honourable thing by keeping their administrative charges to a reasonable markup when monopolizing control of wines from another province. Does a $30 bottle in one province really have to be inflated to $45 or more in another when FedEx could have transported that product more cost-effectively and just as responsibly (and weeks or months more quickly)? That usurious provincial handling premium, dear Supreme Court justices, is a tariff in all but name, and it has the real effect of quashing the constitutionally guaranteed “free” movement of Canadian-made goods – or at least most quality wines – between provinces.

“My background is securities regulation, and what I think needs to happen is much greater interprovincial co-operation amongst all the liquor boards to encourage cross-border selling,” Groia said. “When people ask me, ‘How do you make money in the wine business?’ my quick and glib answer is, ‘You make money in the wine business by being the government.’”

Wines to try

16 Mile Cellar Tenacity Pinot Noir 2015, Ontario

SCORE: 92 PRICE: $50

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Just 180 cases of this pinot, to be released May 5, were produced from a Niagara vineyard that normally yields 600 cases for the boutique estate’s flagship pinot bottling. Such was the weather in 2015, when a devastating spring frost destroyed 75 per cent of the bud clusters. The surviving fruit that made it to maturity, however, clearly benefited from the vines’ reduced crop burden, ripening beautifully. This is silky, supple and succulent pinot, Burgundian in elegance, with notes of cherry, light spice and whispers of caramel and toasty oak. Gently sticky tannins supply welcome structure and bode well for possibly eight years in the cellar. Available direct through 16milecellar.com.

Redstone Cabernet Sauvignon 2012, Ontario

SCORE: 91 PRICE: $45.95

Redstone released this six-year-old red only recently, well after the younger 2013. So concentrated and solid was its structure that the wine was deemed worthy of additional evolution in bottle. Very ripe and luscious, it is built around a core of blackcurrant jam (figuratively speaking) and comes wrapped in slightly dusty, well-rounded tannins, with notes of black olive, underbrush, tangy cedar and toasty oak. Drink it now with steak or cellar for up to 10 years. Available direct through redstonewines.ca.

JoieFarm Un-Oaked Chardonnay 2017, British Columbia

SCORE: 91 PRICE: $21.65

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Terrific. This is medium-bodied, crisp, clean, high-tension chardonnay. Plump in the middle, it’s an orchard-fruit blast of peach, apple and pear, with vibrant, lemony acidity – Okanagan sunshine in a bottle. So much better than the vast majority of similarly priced or more expensive unoaked chardonnays emerging from California and Australia. Available direct through joiefarm.com and at private wine shops in British Columbia.

Quails’ Gate Dry Riesling 2017, British Columbia

SCORE: 91 PRICE: $15.99

Dry – just as billed – and racy with welcome acidity, this is white wine to awaken the brain and senses. Intense lemon-lime and peach fruit electrified by the aforementioned acidity, it’s clean and fresh all the way, closer to Australia’s fine dry-riesling style than to anything from Germany. Versatile at the table, it would make a splendid aperitif and pair especially well with shellfish, including raw oysters, and pork. Soon to be released at the winery, quailsgate.com.

Culmina Unicus Gruner Veltliner 2017, British Columbia

SCORE: 90 PRICE: $27

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Almost off-dry, this is rich and fleshy for a gruner veltliner, the signature white grape of Austria given lovely expression by Culmina in the Okanagan Valley. Stone fruit, pear and orange zest set against bracing acidity, with a nuance of wet stone emerging toward the finish. Worthy of spicy Asian fare, hot-chili-marinated shellfish, pan-seared freshwater fish or grilled pork chops. Available direct through culmina.ca.

Flat Rock Chardonnay 2016, Ontario

SCORE: 89 PRICE: $19.95

Full-bodied and round, with a soft, buttery character supporting tropical fruit, vanilla and toasted-cashew flavours. Fresh acidity for balance. It would be perfect for creamy soups, rich fish such as salmon, or chicken pot pie. Available in Ontario Vintages stores and direct through flatrockcellars.com.

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