1. What is R. v Comeau?
In October 2012, Gerard Comeau of New Brunswick purchased beer and spirits in Quebec and drove back to New Brunswick. He was charged with possessing liquor purchased from outside the province in quantities that exceeded the province’s prescribed limit, an offence under section 134 of the New Brunswick Liquor Control Act. The trial judge held that section 134(b) of the Liquor Control Act constitutes a trade barrier (violating section 121 of the Constitution Act, 1867) and dismissed the charge against Mr. Comeau. The case subsequently made its way to the Supreme Court.
2. Why is the Canadian Vintners Association (CVA) acting as an intervenor in the R. v Comeau case?
The Comeau case challenges current restrictions on interprovincial trade. The Canadian Vintners Association, and the entire Canadian wine industry, see a favourable decision in this case as one that confirms that there should not be any barriers (tariff or non-tariff) to interprovincial trade. This interpretation would open the door to establish Direct-to-Consumer (DTC) shipment of wine, beer and spirits, and would facilitate the expansion of interprovincial trade.
3. What does “Direct-to-Consumer” (DTC) shipment of wine mean?
Direct-to-Consumer shipment of wine refers to a consumer’s ability to purchase and ship wine for personal use directly from wineries in other provinces.
4. How will a ruling by the Supreme Court affect Direct-to-Consumer shipment of wine in Canada? What laws currently regulate Direct-to-Consumer shipment of wine?
The federal government regulates wine shipment through the Importation of Intoxicating Liquor Act. In 2012 the federal government amended this statute to allow interprovincial shipping of Canadian wine for personal use (Bill C-311). The government made this exception subject to provincial law. To date, all provinces – other than British Columbia, Manitoba and Nova Scotia – continue to prohibit interprovincial shipment of Canadian wine into their respective province. The provinces do this through various mechanisms: statues, prohibitions and policy documents. The regulatory structure is inconsistent and unclear across the country. A Supreme Court of Canada (SCC) decision supporting Comeau could overturn the rules that govern interprovincial trade and commerce in Canada. One implication of this decision could be the Direct-to-Consumer shipment of wine.
5. Do other countries allow for Direct-to-Consumer shipment of wine?
Every wine producing country offers Direct-to-Consumer shipment of wine. For example, both the United States and Australia permit a type of interstate free trade, governed by a constitutional test established by the highest courts in those countries. Direct-to-Consumer shipment respects consumer choice and would help grow the Canadian wine industry and wine tourism.
6. What is the economic benefit of a Direct-to-Consumer shipment sales system for wine producers? How much revenue do you anticipate the Canadian wine industry would gain?
Our primary objective is to support the demands of our customers given that most of our premium small lot wines are not available in liquor stores across Canada. In the United States, the total revenue derived from Direct-to-Consumer shipment by small wineries is up to four times greater than it is in Canada. As Direct-to-Consumer shipment is so profitable, prohibiting Direct-to-Consumer shipment within Canada comes at an extreme cost to the financial sustainability of small wineries who would benefit from this channel.
7. Prior to the Comeau case, how has the CVA advocated for Direct-to-Consumer shipment of wine?
Since 2006, the CVA has advocated for Direct-to-Consumer shipment of wine in Canada with a focus on small production 100% Canadian wines both provincially and federally. The CVA was instrumental in the creation of the consumer voice FreeMyGrapes.ca and played a key role in the passage of Bill C-311, which amended the prohibition-era federal legislations, allowing consumers to have wine delivered across provincial borders for personal consumption.
8. In addition to the Comeau case, is the CVA currently pursuing other avenues to advocate for Direct-to-Consumer shipment of wine?
Yes, parallel to the Comeau case, the CVA is actively working with the federal, provincial and territorial Alcoholic Beverages Working Group. (The ABWG was established under the Canadian Free Trade Agreement to provide recommendations on specific opportunities to enhance free trade in alcohol. They’ll deliver their recommendations by July 1st, 2018.) The CVA has provided the ABWG a proposal on how a Direct-to-Consumer shipment system can operate in Canada, is active on social media, has issued several op-eds in national publications, and promotes Direct-to-Consumer shipment through campaigns such as FreeMyGrapes and One Country One Market.
9. Does the CVA’s plan for Direct-to-Consumer shipment of wine include shipments to restaurants, bars and hotels?
The CVA believes that Direct-to-Consumer shipment of wine should include shipments to restaurants, bars and hotels, however, the federal Importation of Intoxicating Liquors Act, only permits wine to be transported across provincial borders for personal consumption.
10. If Direct-to-Consumer shipment sales are allowed for wine, should they also be allowed for beer and/or spirits?
The CVA has no objection to extending Direct-to-Consumer shipment to beer and spirits, as it is already permitted under federal legislation. We believe that consumers should have a choice to purchase products that are not readily available in their home province’s liquor retail system.
11. What level of government would regulate a Direct-to-Consumer shipment sales model for wine?
Under the federal Importation of Intoxicating Liquors Act, which is responsible for the creation of provincial liquor boards, the responsibility for the sales of liquor is a provincial jurisdiction, therefore Direct-to-Consumer shipment sales will be regulated by the receiving province.
12. What do Canadians think about Direct-to-Consumer shipment of wine?
95 per cent of Canadians support a Constitutional right allowing Canadian businesses to sell their products directly to people in any province. 9 out of 10 Canadians believe that consumers should be permitted to order wine for delivery to their home from any Canadian winery located in any province. (According to a Gandalf Group poll commissioned by the Canadian Vintners Association (CVA) in Dec. 2017.)
13. How can individuals support Direct-to-Consumer shipment of wine?
We encourage Canadians to go to FreeMyGrapes.ca and send a letter to their local internal trade representative to support immediate rules to allow for Direct-to-Consumer shipment of wine. The ABWG will be tabling their recommendations with their provincial Internal Trade Ministers by July 1st and this offers a great opportunity to establish Direct-to-Consumer shipment of wine under the Canadian Free Trade Agreement.