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Canada Warns Inter-province Shippers

Two British Columbia wineries told to cease direct shipping

by Peter Mitham
Canada Warns Inter-province Wine Shippers
Spectacular Mission Hill Family Estate in Westbank, B.C., has been barred from shipping its premium wines to other provinces.
Ottawa, Ont., Canada -- Regulators have warned two of Canada's largest wine producers to cease offering their wines to private buyers across provincial boundaries. Wineries and other producers of "intoxicating liquors" may only ship their products to private buyers in the province of production, according to federal legislation dating back to the 1920s. The rise of the Internet, however, has seen many wineries garner the attention of a far broader range of potential buyers.

A willingness by British Columbia wineries Mission Hill Family Estate, the largest B.C.-based winery, and Red Rooster (a division of Andrew Peller Ltd., the largest domestically owned wine company in Canada) to fulfill online orders from customers across Canada recently prompted liquor boards in the provinces of Ontario and Manitoba to take steps to ensure that the wineries respect current legislation.


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Canadian wineries forced to cease offering their wines to private buyers across provincial boundaries.
Diana Soroka, spokeswoman for the Manitoba Liquor Control Commission, said shipments of beverage alcohol across provincial boundaries haven't traditionally been a major issue, but the potential for such sales led MLCC to ask the B.C. Liquor Control and Licensing Branch to remind Red Rooster and other wineries in the province that the law prohibits interprovincial shipments.

While wineries in B.C. have garnered the most attention for transgressions of the liquor shipping restrictions, Soroka said the federal law applies equally to producers across Canada.

"It would apply to anybody producing in another province and selling the product direct--if it came to our attention that that was the case," agreed Chris Layton, spokesman for the Liquor Control Board of Ontario, which warned Mission Hill.

The volume of business being curtailed is probably minimal, Layton told Wines & Vines. "This is related to the opportunity on their website to purchase wines that are not available here, wines that would be of interest to, say, collectors," he said. "That's how it came to our attention."

Layton isn't aware of other cases where Ontario has stepped in to warn producers, and in any event, he said there's no one monitoring the contents of interprovincial shipments to prevent the movement of alcohol. "Chances are we wouldn't be aware of it," he said.

Canada Warns Inter-province Wine Shippers
Red Rooster Winery in Penticton B.C., a division of Canada's largest wine company, was recently asked to stop shipping to Manitoba in violation of federal law.
Canada Post expects its clients to respect federal laws regarding liquor shipments, said Lillian Au, a spokeswoman for the national mail carrier. While wineries are able to request proof-of-age prior to delivery of liquor shipments, it is not required, so packages may land under the radar of authorities.

Layton discounted a suggestion in British Columbia newspapers that the LCBO, one of the world's largest single wine buyers, was acting to protect its financial interests. The same law restricting shipments to private buyers applies to the LCBO and other retailers, he said, so government stores also suffer by not being able to make their stock available outside their respective provinces.

Similarly, he added, the same legislation restricts the private importation of wines into Canada. While a lack of interprovincial shipments may hurt domestic producers, the law's ban on receiving shipments from outside the country protects Canada's wineries.

"What are the ramifications for the Canadian wine industry?" he asked. "If (the law) didn't exist, then presumably that would not preclude American wineries or wineries from other parts of the world selling to consumers in Canada."

Dan Paszkowski, president and chief operating officer for the Canadian Vintners' Association, said his organization plans to pursue the issue with a view to facilitating the movement of wine within Canada.

While the door was opened to interstate shipments in the United States three years ago, the monopoly that most provincial governments currently hold on liquor sales prevents this in Canada.

Paszkowski noted that strict enforcement of the federal law would prevent even individuals from carrying wine between provinces except where provinces have specific exemptions. That's something he doesn't expect that most people, not even legislators, know.
Developing a protocol for shipments between provinces would create another channel for small wineries to sell products that would otherwise require aficionados to visit the shops in person.

"We don't believe it would be a significant amount that would flow. I think it would be the discerning consumer who's very interested in wine," Paszkowski said. "I think there's an opportunity to make something work."

In the meantime, Mission Hill now notes on its website that it faces "certain limitations within Canada for products shipping outside of British Columbia." Red Rooster no longer ships to Manitoba, but it continues to offer shipping to Ontario, a representative said, because it has not been asked to stop.
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Wine Industry Metrics
Off-Premise Sales » Month   12 Months  
August 2015 $608 million
$8,178 million
August 2014 $568 million $7,729 million
Direct-to-Consumer Shipments » Month   12 Months  
August 2015 $80 million
$1,908 million
August 2014 $78 million $1,686 million
Winery Job Index » Month   12 Months  
August 2015 261
August 2014 218 224
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