Wine: Canada and Australia at the WTO

Questioned in a dispute over access to the Canadian wine market, Quebec will be present this week at the World Trade Organization (WTO), where Australia and Canada are preparing to cross the line.
Since the stalemate has not been resolved since Canberra’s January 2018 complaint, the litigation panel will hold two days of hearings on Thursday and Friday in Geneva, Switzerland, according to the official schedule. of the commercial court.

A defeat of Canada could mean a step back for Quebec winemakers, who can sell their products in some 8,000 supermarkets in the province without passing through the Société des alcools du Québec (SAQ) network.

However, the compliance of Bill 88 is one of the elements implicated in this Canadian-Australian dispute.

“We have to win,” said Yvan Quirion, chairman of the Conseil des vins du Québec, during a telephone interview. There are people who have been to see bankers to advance the money that has been invested. What are they going to do [in case of defeat]? ”

For two days, Canadian and Australian officials will be asked to answer the panel’s questions for a decision that should take months to reach.

According to what has been learned, the Canadian delegation includes two Quebec members, whose identity it was not possible to know. If necessary, they will be asked to answer the questions surrounding the law allowing Quebec wines to be sold directly in supermarkets.

“The Government of Quebec has been working for several months, in close cooperation with the federal government, to develop its defense measures at the WTO”, limited to indicate, by email, a spokesperson of the Ministry of the Economy, Jean-Pierre D’Auteuil, in response to questions sent by La Presse canadienne.

By the band

Originally, it was British Columbia that was in the sights of Australia, which felt that the measures adopted in 2015 by this Canadian province to allow its winemakers to sell their products in grocery stores violated international rules.

But by the way, Canberra has decided to blame Quebec, Ontario and Nova Scotia.

“I really do not see how Canada can get away with this story,” said Geneviève Dufour, a professor at the Université de Sherbrooke’s Faculty of Law, during a telephone interview. Our domestic producers are treated more favorably than foreign producers. ”

According to her, a victory for Australia does not necessarily mean that the monopoly of the SAQ would be threatened.

When a measure does not comply with the WTO framework, it must be corrected, said Ms. Dufour, pointing out that Quebec will probably change its regulatory framework, which would be a defeat for Quebec producers.

Since the filing of the complaint, the United States, the European Union, Argentina, Chile and New Zealand have submitted requests to participate in the consultations.

A step back?

The Canadian-Australian dispute worries Mr. Quirion, who says that about “85% of winemakers” here exploit an area of ​​less than three hectares and are not the size needed to do business with the SAQ.

Producer Domaine Saint-Jacques, the Chairman of the wines of Quebec believes that the law allowed 88 Quebec winemakers to “live” beyond the summer period from 24 June to 1 st of September.

“It allows them to sell between 3,000 and 4,000 more bottles in five to six grocery stores nearby,” said Quirion. In direct sales, this adds up to $ 50,000 to their income. It may not be much, but it makes all the difference. ”

In his opinion, the possibility of selling directly in supermarkets allowed some producers to obtain additional sums in order to invest in their facilities in order to penetrate the Crown corporation’s network.

According to the annual report of the SAQ for the year 2018-2019, the market share of Australian wines was estimated at 6%, behind Spain (9%), the United States (10%), Italy ( 24%) and France (30%).

“Canada’s wines, 12% of which are Quebec wines, now account for 3% of market share,” it says.

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