Were BC Wines used as a bargaining chip in the NAFTA renegotiations to protect Eastern Canada’s auto industry?
Canada and the U.S. agreed in principle that wine sales in BC supermarket shelves would no longer be the exclusive domain of BC wines. This was agreed to on September 30, 2018, in a pair of side letters to the United States-Mexico-Canada Agreement (USMCA).<1>
BC regulations currently provide two options for grocery stores to sell wine. Under the “wine on shelf” option, only BC wine may be sold on grocery store shelves. Under the second “store within a store” option, imported and domestic wine can be sold in separated liquor stores inside grocery stores.
For more on the history of the wine trade dispute with the US, see this earlier post – US Trade Dispute with BC Wine on Grocery Shelves Heats Up
The following chart shows that Grocery stores are becoming a significant channel for BC VQA sales with year over year growth of 27%.
Grocery store shelves exclusivity to end by Nov. 2019?
“It’s a problem that I think everyone knew would have to be addressed, and so this begins the steps to remedy that. I think, effectively, it will end the exclusivity. The agreement with the USA could lead to discussions with other countries, specifically Australia. BC wine exclusivity on grocery store shelves would likely be phased out by November 2019. ”
B.C. Trade Minister Bruce Ralston
Opportunity for BC Fruit Wine and Non-BCWI licensed wineries?
“I can’t imagine that if the government is going to allow American wine to be sold in grocery stores that we won’t be included as well. This is something all those fruit wineries are going to be eager to hear about.”
Pat Bell with Northern Lights Estate Winery
The same holds true for all the BC wineries that are not a member of the BC Wine Institute.
July 2019 Update
It is interesting that the USMCA has still not been approved by the US Congress. However, the BC Government has now approved the end of BC Wine exclusivity in grocery stores.
B.C.’s Ministry of the Attorney General said the policy came into effect this week, starting July 8. This means imported wines may be sold on grocery store shelves where grocery stores are licensed to sell wine. It said it is up to each individual grocery store to decide whether or not to choose to sell imported wines, calling it a “business decision.”
Supermarket chain Loblaw, which has 10 stores in British Columbia licensed to sell wine, said it was “excited about the new direction.” It says domestic and international wine will be available to B.C. customers “in the next few months.”
On the other hand, Save-On-Foods’ vice president of innovation Brenda Kirk said the chain will continue to curate its selection from B.C.
“Our interests when we first got into the wine business was to really build on the B.C. wines and we’ve done that,” Kirk said. “That’s our story going forward.” <4>
Reference
- The USMCA explained: Winners and losers, what’s in and what’s out. MACLEAN’s Oct 1, 2018
- Trump Loves the New Nafta. Congress Doesn’t.
- White House is likely to send USMCA trade deal to Congress after Sept. 1, sources say
- Imported wine, cider now allowed on B.C. grocery shelves