Alberta slams door on B.C. wine imports over direct-to-consumer sales

Alberta is blocking imports of B.C. wines, accusing suppliers of bypassing regular trade channels

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In the latest chapter of an interprovincial grapes of wrath, Alberta’s liquor regulator has blocked imports of B.C. wine.

While B.C. vintners are seeing red over the new bottleneck, Alberta Gaming, Liquor and Cannabis says the action was taken after “tangible evidence” showed the western neighbour was avoiding regular taxation channels by sending wine directly to consumers.

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Suppliers from other provinces that offer direct-to-consumer shipping are in contravention of provincial legislation, are bypassing Alberta’s private liquor retailers and liquor agencies, and are impacting the dollars that go to the General Revenue Fund that supports projects and services Albertans rely on,” the AGLC said in an email statement Tuesday.

To maintain the integrity of Alberta’s liquor model and protect the interests of Alberta retailers and liquor agencies, AGLC has notified these suppliers that all shipments to Alberta must cease, effective immediately.”

The direct-to-consumer (DTC) practice also risks putting alcohol into the hands of minors, said the AGLC.

A letter sent to B.C. suppliers said any wine shipments made after Jan. 22 would be refused, until written assurance was received that those DTC exports would cease.

The move comes six years after Alberta’s then-NDP government suspended imports of B.C. wine and beer in retaliation of that province’s move to try to restrict increases in bitumen shipments from Alberta until more studies were conducted on how spills of oilsands bitumen can be cleaned up.

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The ban lasted less than a month after B.C. altered its position on the Trans Mountain pipeline expansion.

The latest corking of B.C.’s wine exports has infuriated that province’s wine industry, which argues it violates Alberta’s own legislation that governs only trade within Alberta.

“There is no basis for the AGLC imposing a penalty of prohibiting exports of wholesale products into the province by B.C. manufacturers that are done in a manner that is fully compliant with all the relevant Alberta requirements,” B.C. Wine Growers of B.C. president Miles Prodan stated in a Jan. 24 letter to AGLC CEO Kandice Machado.

“The (AGLC) letters raise serious concerns for both the individual recipients and for Alberta–British Columbia trade relationships generally.”

B.C. producers said the AGLC letter was sent to more 200 wineries in the province.

The AGLC’s move, he said, is overkill by reacting to the trade practices of a small corner of the B.C. wine industry represented by small batch artisanal vintners whose exports can’t be profitably made within normal channels.

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“Cascadia Partners projects that if the DTC channel was permitted to fully develop in Alberta, even in a steady state, it would represent no more than between 1.8 per cent and 2.6 per cent of the market, meaning that these internet sales would have little impact on ‘brick and mortar’ retailers within the province,” stated Prodan.

Banning B.C. wines will harm small producers already facing challenges such as climate change effects, and will provide an advantage to foreign wine imports, he stated.

“If the suspension is at all prolonged, it will allow foreign producers and importers, free from competition from the Canadian producers who are being excluded from the Alberta market, to significantly increase their share of the Alberta market,” said Prodan.

The AGLC, he said, has also not provided evidence of its accusations and failed to provide a chance to adjudicate the impasse, adding his Kelowna-based group is reviewing legal options.

He said the move is contrary to the Alberta government’s philosophy of freer interprovincial trade, adding his association has reached out to Premier Danielle Smith in a bid to rescind the prohibition.

An expat Albertan who acts as a lawyer for the B.C. wine industry questioned why the AGLC is taking the move now against something — internet or in-person ordering by Albertans — that’s been a reality for so long.

“It’s not like Alberta has an internal wine industry they’re trying to protect,” Al Hudek said from his home in the wine-producing south Okanagan.

He said many in B.C.’s interior who have an affinity for Alberta’s pro-business mindset feel betrayed by the prohibition from a province that’s such a vital market for them.

More to come …

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