U.S. taking action against 'unfair' and 'unacceptable' wine trade measures in B.C.

Following an announcement from the U.S. government that they plan to take action against “Canadian trade measures that discriminated against U.S. wine,” the BC Wine Institute has responded.

The Trump administration has requested a WTO Dispute Settlement Panel over what they say are “unfair” and “discriminatory” rules regarding wine sales in B.C.

A release issued by the United States Department of Agriculture (USDA) states that B.C. regulations exclude all imported wine from grocery store shelves, a new and growing retail channel for wine sales in the province.

“We want customers in British Columbia to have the opportunity to buy our great American wine. The practice of discriminating against U.S. wine is unfair and cannot be tolerated any longer. Our wine producers rely on export markets and they deserve fair treatment, especially by our northern neighbours in British Columbia,” Secretary Sonny Perdue said.

They are challenging regulations that were amended in April 2015 that permit the sale of wine in grocery stores. Stores have two options for selling wine. Under the “wine on shelf option,” only B.C. wine may be sold on grocery shelves. Imported wine may only be sold in grocery stores under a “store within a store” option.

“Such discriminatory measures limit sales opportunities for U.S. wine producers and provide a substantial competitive advantage for BC wine. These regulations appear to breach Canada’s WTO commitments and have adversely affected U.S. wine producers,” says the release.

However, the BC Wine Institute says they are “puzzled” at how B.C. has harmed the U.S. wine trade market.

“While not surprised given the current stall in NAFTA negotiations and the U.S.’s earlier WTO complaint against BC practices, we remain puzzled how they have been harmed as the U.S. has a wine trade surplus of $450.6 million.” said Miles Prodan, President and CEO, BC Wine Institute. “Still, we need to take their concerns seriously and we have been proactive in working with all levels of government to address the concerns of this, and other trade issues."

Although #Osoyoos is experiencing localized flooding, the vast majority of the area remains unaffected and most businesses are open and looking forward to welcoming your business this May long weekend! #WineTour! #BCWine https://t.co/o0UGGkShaG pic.twitter.com/0Hk1J22XyV

— Wines of British Columbia (BC VQA) (@winebcdotcom) May 16, 2018

Prodan goes on to point out that it is important to understand that wine produced in Canada represents just 32%t of total sales domestically, while imports own 68% of our market with the domestic economic impact of a 100% Canadian wine six times greater than an imported wine - $89.99 per bottle compared to just $15.73.

Canada is the U.S.’s second largest wine export market by value, after the EU. The institute says that the U.S. wine industry access to Canadian retail is amongst the best in the world, and since the signing of the 1988 Canada-U.S. Free Trade Agreement, U.S. wine import value to Canada has tripled to 21.4% of total imports.

In B.C., U.S. bottled wine imports rank first in value at $60 million, and have experienced a 10% average annual growth in Canada every year for the past three decades.