US Takes Action Against Canadian Trade Measures That Discriminate Against US Wine
United States Trade Representative Robert E. Lighthizer and Secretary of Agriculture Sonny Perdue announced that the Trump Administration has requested that the World Trade Organization (WTO) establish a dispute settlement panel to examine unfair regulations governing the sale of wine in grocery stores in the Canadian province of British Columbia (BC). The Office of the United States Trade Representative (USTR) is challenging BC regulations that discriminate against US and other imported wine by allowing only BC wine to be sold on regular grocery store shelves.
The United States is challenging BC 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. The USTR is not aware of any grocery stores selling wine pursuant to the more costly “store within a store” option.
“Canada is an important market for US winemakers,” said Lighthizer. “Discriminatory regulations implemented by British Columbia are unfairly keeping US wine off of grocery store shelves, and that is unacceptable.”
“We want customers in British Columbia to have the opportunity to buy American wine,” said Perdue. “The practice of discriminating against US wine is unfair and cannot be tolerated any longer. Our wine producers rely on export markets and they deserve fair treatment, especially by our northern neighbors in British Columbia.”
The BC regulations exclude all imported wine from grocery store shelves, a new and growing retail channel for wine sales in BC. Such measures limit sales opportunities for US wine producers and provide a substantial competitive advantage for BC wine. These regulations appear to breach Canada’s WTO commitments and have adversely affected US wine producers, according to a USTR statement.
In 2017, US wine exports to BC totaled $56 million, and US wine had a 10 percent share of the BC market.
The United States held WTO consultations with Canada on the issue 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.