Trade law and Constitutional Challenges: Why the BC Wine Industry Needs to Worry Now
Mark Hicken, a lawyer here in Vancouver, recently wrote an article on how Canada’s trade obligations under NAFTA and GATT are being violated by the current BC liquor monopoly system. He forecasts that because the distribution and markup systems treat imported wine differently from domestic wine, that this could be the basis for a NAFTA and GATT challenge.
Furthermore, many legal experts knowledgeable about wine law believe that the federal Importation of Intoxicating Liquors Act is unconstitutional. Since this act not only prevents BC wineries from shipping direct to other provinces but is also the legal basis for provincial liquor monopolies, a legal challenge will likely result in a massive shakeup of the current liquor monopoly.
While this is good for consumers, it will be bad for BC wineries since they rely on the competitive advantage given to them by the current system. Mark argues that without a large reform of the system now, if NAFTA and GATT challenges or a constitutional challenge is successful, the resulting shakeup of the BC liquor monopoly could seriously impair a BC winery’s ability to compete in the market. What is needed, Mark argues, is back-end assistance to supplement the high costs of BC wine production, and a reform of the liquor distribution system.
This is a fascinating article and, in my opinion, prescient of the future of wine law in BC. If something isn’t done soon, the entire system could unravel and both consumers and BC winery owners will have a lot to worry about. Reform is necessary NOW, as a proactive approach to solving this problem. A reactive approach will surely end up in the death of many businesses in our province. To read the full article, go here.