SAQ Threatens Canadian Wineries on DTC Shipments
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- Written by Mark Hicken Mark Hicken
- Category: Latest News Latest News
- Published: 30 September 2020 30 September 2020
In the midst of a pandemic which has caused widespread economic pain for the Canadian wine industry, the SAQ (the Quebec liquor authority) has issued an information bulletin which threatens Canadian wineries outside Quebec with enforcement action if they direct ship wine to Quebec customers. The bulletin is located here: Sale and direct delivery of beverage alcohol products to Quebec. Apparently, this bulletin was also sent directly (in the form of a letter) to certain Ontario wineries.
It should be noted that the issues surrounding the interprovincial shipment of alcohol in Canada are complex and were the subject of a relatively recent Supreme Court of Canada decision, R. v. Comeau, which largely upheld restrictive provincial laws. However, the decision also indicated that provincial laws or rules that discriminate as between "out of province" and "in province" producers could be held to be unconstitutional. Quebec has such laws/rules in that it permits Quebec wineries to direct ship within Quebec but does not permit "out of province" wineries to do so. For more detailed information on the laws and rules related to interprovincial DTC shipment, wineries may wish to consult with a lawyer or, for more general information, subscribe to the Alca Winery Compliance Subscription that is available on our sister web-site.
The issuance of the bulletin by the SAQ is a disappointing development as the Canadian wine industry has been working on initiatives to open the country up to the interprovincial trade in wine for years (see Wine Growers Canada and FreeMyGrapes websites). Indeed, the provinces had committed to increase interprovincial access for the alcohol sector in an Action Plan stemming from the 2017 Canadian Free Trade Agreement and had formed a feasibility group to accomplish this. This action flies directly against the spirit of these efforts. At at time when the Canadian economy needs all the help that it can get, it is sad to see a provincial liquor board take an action that will suppress interprovincial economic activity and actively hurt Canadian wine producers in other provinces. Such actions would be unheard of in France where it is, of course, completely legal to ship wine from one part of the country to another. Unfortunately, it appears that the SAQ, and the Quebec government, is taking a narrow short-term view that will ultimately harm Quebec wine consumers.
BC Extends Patio Service Area Expansions Until October 2021
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- Written by Mark Hicken Mark Hicken
- Category: Latest News Latest News
- Published: 18 September 2020 18 September 2020
The BC Liquor and Cannabis Regulation Branch announced today that its earlier program to allow expanded service areas for liquor licensees (including winery tasting rooms and lounges) is being extended from its current end date of Oct 31, 2020 to Oct 31, 2021. This program allows for larger serving areas (e.g. patios) for licensees in order to accommodate physical distancing requirements and other public health order requirements. The policy directive and details are here: Temporary Expanded Service Area - Extension. This change is obviously good news for licensees who will now be able to plan for expanded service areas to continue through the winter and through the bulk of next year.
BC Hospitality Industry Calls for Revised and Focused Covid Response Measures
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- Written by Mark Hicken Mark Hicken
- Category: Latest News Latest News
- Published: 12 September 2020 12 September 2020
In an open letter to the BC Provincial Health Officer and the BC Government, the members of the BC Technical Advisory Panel on Liquor Policy ("BTAP" - a group appointed by the BC government to advise on issues related to the liquor industry) have asked for reconsideration and modification of recent orders made by the Health Officer related to the Covid19 pandemic.
On September 8th, Dr. Bonnie Henry, the Health Officer, ordered all nightclubs and standalone banquet halls to close, ordered music volumes to be reduced, and ordered that all liquor service in all licensees throughout the province must end at 10 pm. BTAP is concerned about both the policy rationale and the devastating economic consequences of these orders, and are particularly concerned about these issues in relation to ending liquor service at 10 PM.
Specifically, BTAP has requested and suggested that government consider the following:
- Extend the end of liquor service from 10 PM to midnight
- Greater enforcement of non-compliant venues and customers, targeting the problem areas directly rather than unfairly affecting good operators
- Provide transparent timelines and/or public health targets so businesses can gauge the long-term effect of any restrictions
Download a copy of the letter.
Full disclosure: I formerly chaired the BTAP Panel and am still a member of the Panel.
Revised Health Order Permits Standing in Tasting Rooms
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- Written by Mark Hicken Mark Hicken
- Category: Latest News Latest News
- Published: 01 August 2020 01 August 2020
A revised Public Health Order was posted this morning (effective yesterday) that fixes the language in the earlier order that prevented customers from standing in a tasting room. The new Order now clearly states that licencees who are manufacturers are not covered by the requirement that all customers must have assigned seats. As a result, customers may stand at a tasting bar in a winery or other manufacturer so long as they comply with the other distancing rules. This is obviously a welcome clarification for wineries during the busy tourist season.
Federal Excise Tax Exemption & Certain Provincial Preferences for Canadian Wine To Be Eliminated
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- Written by Mark Hicken Mark Hicken
- Category: Latest News Latest News
- Published: 27 July 2020 27 July 2020
A press release from Global Affairs Canada issued today (Summary of Understanding Between Australia and Canada on Wine) indicates that the federal excise tax exemption for Canadian wine will be eliminated within 2 years. This action comes in partial settlement of a trade dispute launched by Australia against Canada at the WTO which alleged that various Canadian policies and practices were discriminatory against Australian wine and violated GATT rules.
The practical result of this will be that all Canadian wine (including BC wine) will eventually become subject to federal excise tax (currently levied at a rate of 66.5 cents per litre or just under 50 cents per 750 ml bottle). Prior to this settlement, 100% Canadian wines have been exempt from this tax. The elimination of the tax exemption can reasonably be expected to increase the price of Canadian wines in the marketplace for the end-consumer once it is implemented (i.e. within 2 years).
The progress of this WTO dispute DS537 can be tracked here: Canada - Measures Governing the Sale of Wine. As can be seen here, the WTO Panel is scheduled to issue its Final Report on the dispute in the middle of August. However, this settlement will resolve part of the complaint. It should be noted that the settlement states that it does not "alter Australia's claims with respect to other measures covered by DS537" (i.e. the other matters covered by the dispute).
In addition, and as a related part of the settlement, it appears that Nova Scotia and Ontario have also agreed to change certain preferential provincial practices over the next few years such that Australian and Canadian wines will eventually receive similar tax and distribution treatment. Nova Scotia has agreed to eliminate its preferential liquor markup policies for local wines. Ontario has agreed to eliminate preferential rules in both its grocery channel and taxation treatment of Australian wine. Media coverage from Australia also discusses the settlement: Winemakers Cheer Wins Over Canada's Trade Barriers.