The "cellared in Canada" issue is in the news again this week with a story in Business in Vancouver's current issue: "Gripes Growing Over BC Wine Grape Rules" (subscription required for online access). As readers will recall, "cellared in Canada" (CIC) wines are blended wines made from primarily (or all) imported bulk juice that is then bottled in Canada. The issue that is now in the news is that CIC wines get preferential distribution treatment within BC over other imported wines. Specifcally, CIC wines can be distributed through "direct delivery" which means that the producer can ship them (along with 100% BC wines) directly to consumers and licensees without going through the BCLDB distribution system. All other import wines have to go through the BCLDB distribution system which creates numerous problems in terms of providing timely and efficient delivery to customers. The story quotes CIC producers as arguing that CIC wines provide economic benefits to Canada over other imported products. In addition, there is an argument that CIC wines are competing against other blended global products which by Canadian law are able to identify a country of origin (such as "Product of France") so long as 75% of the wine comes from that country (in other words, up to 25% of the wine can be blended in from elsewhere).
In my view, while there are likely good arguments about the fairness of the distribution system, the sale of CIC wines should not be problematic if the wines are labelled correctly and in a manner which is not misleading to consumers. The recent signage changes at BCLDB stores are a step in the right direction on this issue. However, one issue that still lingers is the legality of the wording on the labels used on most CIC products. This issue was first raised by Arnold Schwisberg at the wine law conference held here in Vancouver this past November. Canadian federal labelling law requires that all wine sold in Canada must contain a declaration of the "country of origin" on the label (see Food and Drug Act, Regulation B.02.108). The Canadian Food Inspection Agency has a guide to their enforcement of the labelling laws on their website. It acknowledges the blending issue and then explains that if a wine does not contain at least 75% content from a single country, so that it can claim that country as its "country of origin", then it must be labelled as follows:
The labels of products which do not meet the conditions mentioned above must describe the various origins on the label. For example: "Made in Canada from (naming the country or countries) grapes (or juices)" or "Blended in Canada from (naming the country or countries) wines"
It seems to me that there is still a problem with the labelling of many CIC wines because most, but not all of them, simply state "Cellared in Canada from a blend of international and domestic wine". This wording does not identify the countries of origin of the wine, as federal law requires. As a result, it is not possible for the consumer to tell where the wine is sourced from. In BC, this wording is particularly problematic because there is, in fact, no requirement that any domestic wine be included in the blend. I have discussed this issue with producers who have told me that CIC blends change quite frequently and, as a result, it would be difficult to continually change the labels to identify the various countries of origin. While that may be true from a practical business perspective, it is not a sufficient answer to the legal problem - the law currently requires the country of origin declaration. In my view, any labels that do not include it are likely in violation of federal labelling laws.