May 25, 2018

Canadian wine sales ‘discrimination’ targeted

The United States is challenging British Columbia regulations that were amended in April 2015 to permit the sale of wine in grocery stores. The amended regulations provide two options for grocery stores to sell wine. Under the “wine on shelf” option, a grocery store may sell wine anywhere within the grocery store, but only BC wine may be sold on grocery store shelves.

Imported wine may only be sold in grocery stores under a “store within a store” option. Under the “store within a store” option, wine sales must be conducted in a “wine store” that is physically separated from the grocery store, has controlled access, and has separate cash registers from the grocery store’s cash registers. As a “store within a store”, a grocery store may sell both BC wine and imported wine.

In 2017, U.S. wine exports to BC totaled $56 million, and U.S. wine had a 10 percent share of the BC market. A number of grocery stores are already selling BC wine on their shelves under the “wine on shelf” option. However, we are not aware of any grocery stores selling wine pursuant to the more costly “store within a store” option. BC’s regulations limit choices and raise costs for Canadian consumers

The United States held consultations with Canada in 2017, but those consultations did not resolve the dispute. Requesting the establishment of a panel is the next step in the WTO dispute settlement process.