British Columbia

B.C. wines to lose exclusive grocery store access under new USMCA deal

In a pair of side letters to the United States-Mexico-Canada Agreement, which representatives from the three countries agreed to in principle Sunday, Canada and the U.S. agreed that wine sales on B.C. supermarket shelves would no longer be limited to just offerings from within the province.

'Wine-on-shelf' system has been in U.S. crosshairs for some time

Wine sales in B.C. grocery stores could be overhauled under the new United States-Mexico-Canada Agreement, agreed to in principle Sunday. (CBC)

Under the new trilateral trade deal between Canada, the United States and Mexico, B.C.'s supermarket wine shelves could get a little more crowded.

In a pair of side letters to the United States-Mexico-Canada Agreement, which representatives from the three countries agreed to in principle Sunday, Canada and the U.S. agreed that wine sales on B.C. supermarket shelves would no longer be limited to just offerings from within the province.

"B.C. shall eliminate the measures which allow only B.C. wine to be sold on regular grocery store shelves while imported wine may be sold in grocery stores only through a so-called 'store within a store,' and such contested measures shall not be replicated," a letter from U.S. ambassador Robert Lighthizer stated.

Canadian Foreign Minister Chrystia Freeland sent a letter in reply, "confirming that Canada shares this understanding."

B.C. regulations currently provide two options for grocery stores to sell wine. Under the "wine on shelf" option, only B.C. wine may be sold on grocery store shelves.

Under the the second "store within a store" option, imported and domestic wine can be sold in separated liquor stores inside grocery stores.

Just the beginning?

The U.S. has filed complaints with the World Trade Organization over the "wine on shelf" system, which it alleges gives B.C. winemakers an unfair advantage. In the side letters, the U.S. committed to dropping those complaints.

However, other jurisdictions, including the European Union, Australia and New Zealand have also complained to the WTO about the exclusivity of B.C. wine on grocery store shelves.

B.C. Trade Minister Bruce Ralston believes the agreement with the U.S. could lead to discussions with other countries, specifically Australia.

"It's a problem that I think everyone knew would have to be addressed, and so this begins the steps to remedy that," Ralston said. "I think, effectively, it will end the exclusivity.

Ralston said B.C. wine exclusivity on grocery store shelves would likely be phased out by Nov. 2019.

Wine industry not overreacting

Miles Prodan, the CEO of the B.C. Wine Institute said sales from the wine-on-shelf option saw "tremendous" growth but didn't add up to a significant amount of shelf volume.

He adds there is still a great deal to be determined about what the greater access for non-B.C. wines will actually look like in stores.

"Does that look like some part of the shelf space? How much? We've got 13 months to figure out what that really looks like," Prodan told B.C. Today host Michelle Eliot.

Save-On-Foods, which sells B.C. wine at more than a dozen of its stores, said the new trade deal "definitely does not affect our long-standing commitment to supporting our local B.C. wineries."

"We remain fully committed to offering B.C. wines ... in our stores," a spokesperson wrote in an email.

B.C. VQA wine has been stocked on the shelves of several B.C. grocery stores since 2015. (CBC)

One B.C. fruit wine producer is hopeful the change could provide new opportunities.

The current rules only allow VQA wines to be on grocery store shelves, and the VQA only certifies wine made from grapes.

Pat Bell with Northern Lights Estate Winery, a fruit winery in Prince George, hopes the change could finally allow him and his colleagues onto grocery shelves.

"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," Bell said. "This is something all those fruit wineries are going to be eager to hear about."

With files from Megan Thomas, Andrew Kurjata, Tina Lovgreen and CBC Radio One's B.C. Today

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