The Vancouver-based broadcaster and former Much Music personality is going to load a case of Okanagan wines into his car and drive east to Alberta. When he crosses the border, Mr. Mulligan will have broken a federal law.
The crime? Violating an obscure 1928 legislation that makes it illegal for consumers to transport even a single bottle of alcohol across provincial boundaries. To be sure, it’s a publicity stunt – Mr. Mulligan even plans on alerting the RCMP in advance, and the deed will be filmed for good measure. But it also highlights a growing battle in Canada’s wine industry, which has long blamed the Prohibition-era law for stunting its growth.
“If they don’t charge me, then the law is useless, it is stupid and we should just throw it out,” said Mr. Mulligan, who hosts Tasting Room Radio on the CKUA Radio Network and co-hosts TV wine-and-travel series Hollywood and Vines with actor Jason Priestley. He is also a former Mountie and recently sold his ownership stake in the Black Hills Estate Winery in Oliver, B.C.
The original purpose of the 83-year-old Importation of Intoxicating Liquors Act – and ensuing provincial and territorial laws – was to give cash-strapped provinces a monopoly over alcohol sales and, thus, a new source of tax revenue. It’s just one example of provincial governments setting up trade barriers in an effort to protect their own businesses. The result has been a sprawling, powerful and sometimes obscure set of rules that the MacDonald-Laurier Institute public policy think tank last year calculated costs Canadians up to $8-billion a year.
The effects of such barriers to trade reach beyond the wine industry: Ontario and B.C. have different standards for bus brakes, for instance. Alberta hay cannot be trucked to B.C. unless it’s unloaded and repacked. And in a landmark ruling last October, a federally appointed panel determined that Ontario’s ban on a margarine-like spread made in Western Canada violates the 1995 Agreement on Internal Trade that committed the provinces to dismantle barriers between them.
But now, unable to readily access a long list of award-winning Canadian wines, industry and consumer groups are putting pressure on federal election candidates – especially those in the vineyard regions of Ontario, British Columbia and Nova Scotia – to turn their focus on wine.
“It's crazy that it is legal for me to bring two bottles of wine home from Argentina but I’m threatened with a federal record that includes fines and potential jail time for bringing wine to a friend’s cottage in Quebec or home from a visit to B.C.,” said Shirley-Ann George, president of the Alliance of Canadian Wine Consumers.
People like Ms. George have found at least one political ally in Ron Cannan, the Conservative incumbent MP for Kelowna-Lake Country. In November, he tabled a motion to amend the law to allow consumers to purchase wine directly from out-of-province wineries. Motion 601, however, died on the order paper when the election was called. Mr. Cannan has vowed to reintroduce it if he’s re-elected and is optimistic about garnering all-party support.
For Canadian wine makers, the law is a major challenge as they fight for shelf space against cheaper, international brands.
“How do we grow an industry … when you can’t even have somebody pick up the phone in Vancouver and say ‘Send me a case of wine from Ontario?’ ” asked Seaton McLean, co-owner of the Closson Chase Vineyards in Prince Edward County, Ont. “It is hard enough trying to sell wine to the United States or Europe. We can’t even sell it to ourselves.”
The Liquor Control Board of Ontario, one of the world’s largest alcohol retailers, said it sold more than $1-million worth of wine from other provinces, the vast majority from B.C., through its private order service during 2010. It usually takes about three weeks to fulfill an order unless a customer is willing to pay for rapid shipping.
Reform has already taken place in the United States, where wineries in 37 states can legally ship to out-of-state residents, representing roughly 1 per cent of total wine sales. The U.S. Supreme Court ruled in 2005 that states must apply the same shipping rules to both in-state and out-of-state wineries. In doing so, it struck down New York and Michigan laws that prevented out-of-state wineries from shipping directly to consumers (by forcing them to sell their products through licensed wholesalers) even though their in-state counterparts were free to do so.
Dan Paszkowski, chief executive of the Canadian Vintners Association, says Canada ought to consider replicating that model since small wineries have a hard time convincing provincial liquor boards to sell their products.
“I think it could become an election issue,” he said, adding not a day goes by when he doesn’t hear from frustrated consumers and vintners. “E-commerce is taking off and the wine industry in Canada may be one of the only wine industries in the world that can’t take advantage of it.”
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