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NY Wine in Supermarkets – Less Wine in Australia

Two news stories are in the headlines today, both of which are indicators of important issues facing the wine industry in BC. The first is a an editorial in the New York Times supporting NY Governor David Paterson\’s attempts to open up that state\’s retail wine business so that its existing \”standalone liquor store\” provisions are removed and that state supermarkets also be permitted to sell wine and beer. Here in BC, we are still struggling to get our retail system to New York\’s current stage. Currently, we still have an unworkable mix of government retail and private stores all serviced by the government wholesaler who is in a conflict of interest. Just this past December of 2009, our laws were amended (sensibly) such that private stores no longer need to be associated with a bar or hotel license (hallelujah). However, all of those stores are bound by standalone provisions … similar to New York\’s current laws. Supermarket sales are not even on the agenda. The second issue is the global glut in the wine industry. Australia\’s wine industry has grown by leaps and bounds over the last decade. However, global economic conditions and uncontrolled growth have resulted in a serious glut of wine in Australia. Australian regulators and wine industry groups are trying to figure out how to reduce production by 25% in order to restore economic balance to the industry. So far, BC\’s wine industry has escaped these global problems due to our protectionist system which creates inflated retail prices disconnected from the world economy and which discourages competition by making entrance to the market exceedingly difficult. However, the BC industry should be watching these issues carefully. Sooner or later, our system will have to change in order to comply with Canada\’s trade obligations. When that happens … look out.

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