Small wineries don’t have much of a future if inter-provincial trade barriers aren’t lifted.
That is the belief of Ian MacDonald, president and founder of Liquidity Wines Ltd., after a Supreme Court released a ruling Thursday that failed to do just that.
“If you look 10 or 20 years down the road it will not be very robust or healthy. If there isn’t direct-to-consumer shipping I feel like the industry will collapse over time. Small wineries in places like California, Washington State and Oregon wouldn’t survive the same thing,” said McDonald. “I don’t think the small winery would exist long-term without the opportunity. It will be just a couple of large groups that control wineries and the products. Then you will have controlled and monopolized pricing, restricted production and lose access to small-batched quality wine.”
The Supreme Court of Canada’s ruling on Her Majesty the Queen v. Gerard Comeau, which challenged restrictions on interprovincial trade, an issue the wineries and related associations have been working on for over a decade to allow direct-to-consumer shipping across the country.
In October 2012, Comeau purchased beer and spirits in Quebec and drove back to New Brunswick. He was charged with possessing liquor purchased from outside the province in quantities that exceeded the province’s prescribed limit, an offence under section 134 of the New Brunswick Liquor Control Act. The trial judge held that section 134(b) of the Liquor Control Act constitutes a trade barrier (violating section 121 of the Constitution Act, 1867) and dismissed the charge against him. The case subsequently made its way to the Supreme Court.
However, MacDonald said there were several other components in the decision that will need a lawyer’s fine-tooth comb to go through. He, along with four other Okanagan wineries banded together to act as interveners in the Supreme Court appeal. MacDonald said the door is not quite closed and there could be future legal challenges to make a case for more universal and freer movement of goods between provinces.
“Movement in this direction is critical and it is not just the wine industry … once we lose the ability of free movement of goods and services throughout our nation and are guided by punitive practices then I think the whole concept of Canada comes under question,” he said.
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MacDonald added that the freedom to have direct-to-consumer shipment across a nation’s borders is not a new idea.
“There is no other wine-producing country in the world that faces these kind of restrictive regulations. We are not asking for something that we dreamed up. It has worked extremely effective in other countries … we just want to be treated in this industry the way others are treated globally.”
The disappointing decision for MacDonald is a sentiment echoed by many in the wine industry on Thursday.
“This morning’s ruling is disappointing for our industry. Every wine producing nation in the world has direct sales within its own country” said Tony Stewart, proprietor and CEO of Quails’ Gate Winery. “Canada needs to correct this so that we can start to create a level playing field with the rest of the world.”