Commentary and Analysis for the Canadian Wine Industry
Category:Legal Info for the Industry
The articles in the following sections were written specifically for the wine industry (wineries, agents, distributors). However, depending upon the topic that you are looking for, you may also find useful information in the section designed to provide legal information for the public .
New Allergen labelling rules for wine in Canada become effective on August 4th, this Saturday. Bottled wine with a vintage date of 2012 or later and all wine packaged without a vintage date must now make declarations on the label in certain conditions:
If the wine contains sulfites in an amount greater than 10 ppm, this must be declared on the label either in the ingredients or a \”contains …\” statement.
If the wine contains any significant amount of residual protein from the use of eggs (ovalbumin), fish (isinglass) or milk (casein) products as a fining agent, then this must be declared on the label either in the ingredients or a \”contains …\” statement. This requirement could be important for wine that is unfiltered.
Wineries and other licensees should be aware that the BC LCLB issued a statement on internet marketing in the October 2011 issue of their “Liquor Line” newsletter which is available on the LCLB website here. The statement warns licensees that the sale or advertising of any liquor product without a license is not legal in BC. It then continues by saying “[t]herefore companies like Groupon or ethicalDeal.com cannot legally include liquor as part of a promotion. Given this, it is not permitted for licensees to enter into and offer these sorts of promotions. (emphasis added)” This wording could be interpreted as prohibiting many third-party marketing companies from including liquor as part of their marketing services or promotions when they are working with a licensee such as a winery or retailer.
The question then arises: is it legal for third party marketing companies to work with licensees at all and, if so, what can they do? It is my view that it is legal for third party marketing companies to work with licensees so long as all parties pay careful attention to structuring their relationships correctly. The issues are basically the same as those faced by the California ABC which recently issued a detailed advisory on these issues (Third Party Providers – PDF) which was created after extensive industry consultation and legal advice. It’s my opinion that the analysis in the California advisory is well done and should also be applicable to British Columbia.
I have confirmed with the BC LCLB that their statement was based on an analysis of the ‘default’ method of Groupon promotion under which the marketing company processes and is an integral part of the sale. However, there are, in fact, many other methods of structuring internet promotions (some of which may be legal and some of which may not) and the LCLB has also confirmed that “each case must be considered on its own merits”. However, the LCLB has not confirmed that they will follow the same principles as have been established in California and there may well now be confusion within the BC industry as to what is permissible and what is not (as there was in California prior to the ABC issuing its ruling). In the interim, licensees should be cautious about internet marking and should obtain legal advice if they are entering into these types of marketing arrangements.
This is a short guide to the unconventional approach to licensing wineries that BC has adopted. In most jurisdictions, it is possible to read through the winery licensing requirements within the applicable laws … in other words, it is fairly easy to discover what the requirements are for obtaining a license. However, in BC, this is not the case. There are some requirements listed in the Liquor Control and Licensing Act. However, the most onerous requirements are imposed by the Liquor Distribution Branch, which may not have the statutory jurisdiction to regulate the manufacture of wine.
I spoke about the issues surrounding \”host liability\” for wineries at the recent wine law conference that was held in November here in Vancouver. Those of you that were there will have heard my warnings regarding a winery\’s potential legal liability if an individual who has been served alcohol at the winery is in an accident later that injures either himself or another person.
While I am unaware of any B.C. wineries being in this situation recently, a news story from California illustrates the expensive consequences of a failure to live up to the applicable legal standards. In this case, the Sonoma County winery had hosted a wedding event and served numerous beers to a guest who was, in fact, under age. That guest ended up in a car accident later in the night in which his passenger was seriously injured. The passenger sued the winery, 7-Eleven (who later had sold some additional alcohol to the pair), and the driver. The eventual settlement ended up with the winery shouldering the bulk of the costs.
The holiday season is upon us. While most of the season generally revolves around a spirited (pardon the pun) and responsible celebration involving wine and other liquor, the issue of legal liability for alcohol service always crops up at this time of year as businesses of all kinds become aware that good times can turn into a problem if someone ends up injuring themselves or others following a seasonal party at which they have consumed alcohol.
I have received a number of inquiries about this issue in the past few weeks so here is a quick (non-comprehensive) summary of the applicable law as well as a few ideas for limiting your liability.
There is one set of rules that I will call \”commercial host liability\” for restaurants, bars etc… most situations where a business is making money serving drinks. This would definitely include wineries or agencies in situations where they are either charging for wine, running a tasting room/event, or selling or promoting wine as an adjunct to an event. On the commercial host side, the rules are pretty strict in that the business has a fairly high duty of care toward a patron who has had too much to drink and they can be found liable if they don\’t do enough to prevent that person from injuring either themselves or someone else. All wineries and agencies should have staff trained to recognize liability and alcohol service issues for these types of events. You can read more on commercial host liability in the Supreme Court of Canada decision of Stewart v. Pettie (2005) which is the leading decision in this area.
On the other side, there are a set of rules for \”social host liability\” which basically apply to private parties. A more recent (2006) Supreme Court of Canada decision, Childs v. Desmoreaux, has found that, for the most part, social hosts do not have a duty of care to their guests and those guests are responsible for their own behaviour. If you are interested, you can read about this decision in this article or here.
It\’s already a major issue for wineries in California. I know that faculty at UC Davis are now considering water needs and ability to survive drought as an important factor when selecting rootstocks for new vineyard plantings. Here in water-abundant Canada, this has historically not been a major concern. But an article in Wine Business Monthly Online shines a light on similar Canadian concerns in its review of the Okanagan Sustainable Water Strategy and the implications for wineries in the region. The article points out that winery use of water is a tiny percentage of overall usage and that conversion to drip irrigation is making industry use of the resource even more efficient.
The legal implications of water usage are still generally a backburner issue. However, occasionally, as the article points out, the Province can use its powers under environmental laws to cut off water supplies to users as happened for some Okanagan wineries in 2003 during a drought. In addition, water concerns can block development, whether residential or otherwise (including wineries), if the development threatens to change water usage or conservation patterns.
This article summarizes the laws that apply when wine is shipped between Canadian provinces for personal consumption. Please note that other articles apply for the following situations:
This article provides a summary of the shipping laws regarding wine (and other liquor) within Canada. This article is updated frequently and was current as of October 2019. However, the laws in this area are changing rapidly. Please contact a lawyer in order to ensure that you have the latest information.
The shipping of any alcohol from one province into another province was previously prohibited by a federal law (which stems from the prohibition era) called the Importation of Intoxicating Liquors Act (Canada). However, in June 2019, the federal government repealed this prohibition entirely in respect of the interprovincial transport or shipment of alcohol. Nevertheless, the various provinces have not embraced the spirit of this reform and have created various provincial laws and barriers to interprovincial “direct to consumer” shipments.
The Supreme Court of Canada decision in R. v. Comeau was released in April 2018. Generally, the court upheld provincial legal restrictions on the inter-provincial purchase/import of alcohol as long as they are connected to a legitimate provincial objective other than restricting trade. This decision directly affects the issues discussed on this page. Legal advice may be required on the implications of this decision.
The following chart summarizes my views on the ability of consumers to receive “direct to consumer” interprovincial shipments of wine under the laws in the various provinces.
British Columbia
DTC from Winery?
Yes
DTC from Retailer?
No
Quantity Limits
Amount for personal consumption if 100% Cdn wine from winery.
Comments
DTC sales and shipment is permitted only for 100% Canadian wine purchased directly from a winery. BC has also eliminated the limits on alcohol importations from other provinces but only in respect of “in-person” importations (no shipment).
Alberta
DTC from Winery?
Unclear
DTC from Retailer?
Unclear
Quantity Limits
Amount for personal consumption
Comments
Alberta law says that adults may “import” liquor from other provinces (and other countries) in amounts determined by regulation. The regulation (s.89) makes importation from other provinces “subject to the policies of the Board”. The Board’s policies are set out in section 3.27 of this manual and which restrict importation to amounts that are personally transported (i.e. not shipped). It is not clear whether this “policy statement” has a valid basis in Alberta law since it may not be consistent with the language in the Act and Regulation.
Saskatchewan
DTC from Winery?
Yes (from BC only)
DTC from Retailer?
No
Quantity Limits
9 litres
Comments
Saskatchewan is open for DTC shipments of wine and spirits from BC only (not other provinces). An authorization (for the customer) is required from the SLGA which is valid for one year. Maximum quantity per shipment is 9 litres (one case) but multiple shipments are allowed. The customer is required to submit markup to the SLGA upon receipt of the shipment. The markup for wine is $5.25 per 750 ml bottle. See details here: Direct Shipment to Saskatchewan.
Manitoba
DTC from Winery?
Yes
DTC from Retailer?
Yes
Quantity Limits
Amount for personal consumption
Comments
Section 71 of Manitoba’s new law governing both alcohol and cannabis refers to the fact that it is permissible to possess and consume liquor that has been “lawfully imported” into Manitoba. Manitoba’s liquor web site indicates that DTC is permissible.
Ontario
DTC from Winery?
No
DTC from Retailer?
No
Quantity Limits
9 litres
Comments
Ontario has recently amended its laws to prohibit the possession of alcohol that has been imported from other provinces unless the alcohol was imported by or under the authority of the LCBO.
Quebec
DTC from Winery?
No
DTC from Retailer?
No
Quantity Limits
9 litres
Comments
Provincial law restricts transport of wine not purchased from liquor board within Quebec. Regulations have been issued which allow the importation of alcohol from other provinces but they only permit 9 liters of wine per person and only if it has been personally transported (no direct to consumer shipment).
New Brunswick
DTC from Winery?
No
DTC from Retailer?
No
Quantity Limits
Single bottle
Comments
The recent decision in R. v. Comeau upheld New Brunswick’s provincial laws that restrict its residents from purchasing and importing wine from outside the province beyond a “single bottle”.
Prince Edward Island
DTC from Winery?
Yes
DTC from Retailer?
Yes
Quantity Limits
9 litres
Comments
It is my view that the only reasonable interpretation of the word “import” in the amended legislation includes both in person transport and direct shipment. The PEI liquor board is stating that it is not open for shipment, only for “in-person transport”. In my view, this is not a reasonable interpretation of PEI law.
NL only permits “in person” importations from out of province as described in the accompanying article. Note that the NL liquor board charged FedEx with shipping BC wine from a winery to a customer in Newfoundland. The case did not proceed after the defence lawyer made an argument that NL laws could not reach a federally regulated courier such as FedEx.
The Wines of Marked Quality Regulation is the guts of BC\’s new wine labelling and content regulation. It creates 2 categories of wine: 1) the familiar \”BC VQA\” wine category which is actually a slightly watered down version of the old one, and 2) a new lesser category, the \”BC Wine of Distinction\”. BC VQA wines must meet all the requirements of the BC Wine of Distinction plus some additional ones (the most contentious of which is a taste test).
This article is currently not comprehensive and will be expanded as time permits me to do so. There is currently a patchwork of content and labelling laws in place in Canada with no consistent national standards (although there is an ongoing initiative to do this).
Please also be aware that if you intend to distribute your product outside Canada, there will likely be requirements in the destination country. For example, all wine sold in the U.S. must get label approval from the federal Alcohol Tobacco Tax & Trade Bureau (TTB).
