Wine Wars: Australia takes Canada to WTO Alleging Discriminatory Rules Governing Wine Sales

On January 12, 2018, Australia brought a historical first WTO trade dispute against Canada. The request for consultations alleges that the Canadian Government and the Canadian provinces of British Columbia (“B.C.”), Ontario, Quebec and Nova Scotia discriminated against imported Australian wine by maintaining discriminatory trade measures governing the sale of wine. The alleged discriminatory measures include: distribution areas, licensing and sales measures (i.e., product mark-ups), market access and listing policies, and duties and taxes applied at the federal and provincial level. Pursuant to WTO rules, the parties have 60 days to settle the dispute after which time Australia may request adjudication before a WTO panel.

Australian exports of bottled wine to Canada declined by nearly half between 2007 and 2016. Australia Trade Minister Steven Ciobo discussed the request for consultations and Australian wine exports to Canada in a January interview with Australian Broadcasting Corp. In the interview he stated, we have continued to see an erosion of, for lack of a better term, liberalized market access into Canada . . . we are aggrieved over the domestic (wine) regulations that they have in place. It sends a very clear shot across the bow to Canada.”

This complaint follows a similar request for WTO consultations made by the United States against Canada on September 28, 2017. In that request, the U.S. accused the Canadian province of B.C. of discriminating against U.S. wines by providing an exclusive retail distribution channel for B.C. wines in Canadian grocery stores. This was the second request for consultations by the U.S. regarding the sale of wine in B.C. grocery stores, and followed a nearly identical January 2017 request for which the U.S. did not pursue WTO panel adjudication.