Borderless Bootlegging: The Canadian Wine Shipping Quagmire
by Craig Pinhey
Reader Comments... [14]

Jeff, Winemaker
Look at the protectionist speak coming out of the liquor boards, but especially the Canadian Vintners Association: 'only the best wines will be given limited country-wide distribution' blah, blah, blah. It is utterly disgraceful that this problem has not been dealt with until now. How can you pretend to represent Canadian Vintners, and have done nothing about this problem until now? What have you guys been doing for the last 20 years?

I mean, this is staggering incompetence. If you want to find out how to solve this problem, and solve it quickly, ask the Australians. They have no interstate trade barriers. In fact, to my knowledge, it is actually illegal for trade barriers to be in place. As a consumer, you are free to buy wine from any winery in Australia. Wake up and look beyond your own borders. Find someone who has solved the problem (Australia), copy what they have, and let's all go back to making and selling wines to whomever wants them, regardless of where they live.

[see my follow up comments - comment #9]

Seaton McLean, Co-Owner
Closson Chase Vineyards, Prince Edward County, ON
Well, said Jeff [comment #1].

We are located a three hour drive from the Quebec border. A large percentage of visitors to our winery are Quebecers. As it stands now, and has stood for the last sixty years, any of these people returning home with a few bottles of our wine in their trunk could be arrested at the Quebec border! So much for promoting Canadian unity. I love your wine Jeff, but not enough to go to jail.

The real reason that this hasn't changed is that the folks at the LCBO fear an erosion of their monopoly by direct delivery. Obviously, they can't get their hands on any of the revenue that comes from an out of Province sale via the Internet. Access to markets, especially those within our own country, is vital to the survival of small to mid-size wineries and our politicians need to hear that message loud and clear.

Bradley Cooper, Winemaker
Township 7 Vineyards, Penticton, BC
I am against restricting the sales of food products that contain alcohol with artificial provincial trade barriers. I do not believe the wine I make should be sold and shipped any differently than my neighbour's apples. Let's get rid of these onerous regulations that prohibit the citizens of one province in this country from accessing the products of another province. It's an international and domestic embarrassment.

Brian Raue, Managing Director
Masterpiece Premium Wines, Australia
I read with interest the article and whilst we enjoy cross border wine sales in Australia and do not have old and outdated laws that are a hangover from the '20s, to appease the provinces in Canada, I propose the following:

Wine shipped from province 'A' to province 'B' attracts taxes ONLY in province 'B'. This way taxes are paid where the wines are consumed.

Province 'A' will miss out on all taxes, so it will not be long before the province missing out, will lobby to get rid of the laws created so long ago, when times were different. Greed of Government may bring sanity into the liquor laws of Canada!

Jeff, Avid wine consumer
Atlantic Canada
Provincial Liquor Boards only exist to practice nepotism, and allow political parties an avenue to exert influence. Their moral ethos was lost long ago, their economic advantage is a myth, and their only remaining argument against on-line wine sales is a preposterous lie – underage drinking would be encouraged (what a blatant lie, at the expense of the taxpayer they pretend to serve). Take a cruise through any internet social network site. The kids could not bother trying to acquire more access to booze than they have now! They can't drink what they have!

Let’s ask questions like: Who has the better wine cellar in Canada? An LCBO Board Member or the average Canadian who likes wine?

Who paid the most for the cellar contents (really)?

Let's face up to the truth – they protect us from nothing, they offer us nothing we could not have without their little industry spinning away, and they only exist to serve themselves.

Now, that feels better, eh? Glad I got that off MY chest. So why do we allow them to continue intruding into our lives, and making Canadian products harder to get than American ones?

The phrase "first against the wall when the revolution comes" comes to mind.....

Paul B.
Toronto, ON
It is time for the prohibitionist hangover to end. We live in a time when the artisanal wine scene is flourishing, and will likely continue to do so due to the development of new-generation grape varieties that can produce fine wine across much of continental North America. What is needed is a positive, rather than regressive, approach, to allow consumers the freedom to discover wines from all across the country. Further, wine, like fine artisanal cheeses, ciders, beers, etc. must begin to be seen not merely as (1) a commodity, and (2) a noxious substance, but as food. What we need is the common-sense of the Australian approach (no trade barriers within the country), and the healthy, wholesome approach to wine that exists in the cultures of France and Italy, to name but two.

Tilman Hainle, Winemaker / Owner
Working Horse Winery, Okanagan Valley, BC
The inter-provincial liquor trade barriers are indeed a post-prohibitionist holdover (hangover?), and I will support any reasonable, concerted effort to get rid of them, so that wine enthusiasts across Canada can get access to the finest wines that this country can produce.

We live in a time when the challenges related to mail, phone or internet ordering of wine can easily be overcome (look just south of the 49th for an example), so let's try as an industry to make it work.

Gabriel Anderson, Canadian wine lover
It would appear that the LCBO is only concerned about out-of-province wine buyers when they are not the beneficiary of the sales – a point well made by Globe and Mail columnist Beppi Crosariol in his Sept 17th article “Tear down provincial barriers to wine and you get my vote”:

"We are required to ensure that suppliers abide by the law," LCBO spokesman Chris Layton said, …the board would have been remiss in its obligations if it had not warned the winery to alter its website to block out-of-province orders...

…It seems obvious to me that the LCBO is being inconsistent in citing the moral high ground in dissuading parties from shipping wine across provincial lines. The LCBO itself, in its 2005-06 annual report, proudly pointed to a $25-million windfall from the preceding fiscal year attributable directly to cross-border shopping by Quebeckers seeking relief from a strike at the SAQ, the LCBO's provincial counterpart.

…I can find no mention in the annual report of Ottawa-area LCBO cashiers doing the responsible thing and ramping up ID spot checks to ensure customers were not from Quebec, even though parking lots were teeming with out-of-province plates and with drivers clearly intending to break the venerable ‘Importation of Intoxicating Liquors Act.’ Any fool could see what was going on. But why sabotage lawless behaviour when you stand to gain $25-million on the balance sheet?

Gee!...the LCBO – a model of hypocrisy and self-interest. What a surprise! Read Beppi’s full storey here.

Jeff, Winemaker
In response to my original comment [comment #1] on the issue of inter-provincial barriers to trade in wine, I must digress and state that it is best to wait 24 hours and think out my thoughts before posting feedback for the world to see. As a winemaker, I find it very frustrating not to be able to share the fruits of my passion with consumers across Canada. My comments were not meant to sound as if I was advocating for the abolition of liquor boards, but rather to voice my frustration with a system that does not permit Canadians to access the high quality wines they learn about in magazines, newspapers and television programs. I cannot understand why the facilitation of consumer choice for our best 100% Canadian wines is taboo? Is it possible that our provincial governments and liquor boards are on the wrong side of public opinion on what wine consumers are demanding?

In my quick response to the Craig Pinhey article, I also suggested that the Canadian Vintners Association (CVA) is doing nothing to facilitate consumer choice. I was clearly wrong and for this I apologize. Many colleagues have informed me that this is on the radar screen of the CVA and they are developing options for a direct-to-consumer delivery system in Canada. Since retailer theory would suggest that "the consumer is never wrong," let’s move quickly to ensure that consumers from across Canada are provided a direct delivery system which will permit them to enjoy the best that we have to offer.

Cathy B, Canadian Wine Consumer
Ottawa, ON
As a wine consumer, I was shocked to hear that it was illegal to purchase wine directly from an out-of-province winery. In this modern day of internet when I can purchase almost anything and have it legally delivered to my doorstep, it makes no sense to exclude wine. I think that the LCBO has great retail stores, but let's face reality -- they don't have every bottle of Canadian wine that I would like to purchase.

As a growing fan and consumer of Canadian wines, when I learn about great wines from BC or Nova Scotia, why shouldn't I be able to order them online and have them delivered in record speed. This would not deter me from continuing to purchase wines offered by my local LCBO, but it really irks me to think that our governments would punish Canadian consumers with a fine or worse jail term, for ordering a case of award winning CANADIAN wine! Let's give consumers the chance to enjoy what Canada has to offer, and grow what is a really exciting wine industry.

As a consumer I want this debate to continue. Has anybody considered starting a petition, blog etc., to show our provincial governments and liquor boards that they are on the "wrong side" of public opinion on this one?

~ Cathy B

Steve Kocsis, Winemaker
Mountain Road Wine Company, Beamsville, ON
Inter-provincial market access would be wonderful but here in Ontario we can't even freely sell to fellow Ontarians. Successive provincial governments who benefit from a shared monopoly (LCBO) with Constellation Brand's grandfathered retail stores dominate the market and will stifle any moves to open up the market. The Wine Council of Ontario who should be pushing for greater access for its winery members is completely co-opted by the veto power of the two largest members. It is also beholden to the province for most of its funding and its political appointees short circuit any meaningful progress. Political greed ($1.6 billion dollars bled from the industry annually) and political cowardice (lack of courage to stand up to the unions that would rather see the rural economy wither than see their LCBO face fair competition) has been the way for too long.

As a slight digression from the inter-provincial topic, perhaps we could get our provincial houses in order first. The following is my recommendation:

Re: Wine Stores.

-- New wine store licenses should be tied to the land that produces the fruit from which the 100% Ontario wine is made.

-- Those growers that choose to make wine could be issued a license to open a store in the urban centre of their choice to reach a broader customer base.

-- Growers who choose to sell their fruit to other wineries could grant that winery the use of the license that accrues to the land that grows the fruit.

-- Each 10 or 20 acres of vineyard or orchard would be entitled to one license. This would give back the value of the land that the Greenbelt Plan expropriated without compensation.

-- The AGCO and LCBO could continue to collect the taxes and enforce the regulations as they do now over alcohol sales at on-farm wineries, Beer Store Outlets, the foreign owned grandfathered stores, the LCBO outlets, restaurants and special occasion permits at banquet halls.

-- There would be no trade consequences since foreign individuals and corporations would be free to buy vineyards to gain entitlement to the new store licenses. It would also make it more difficult for them to accumulate and hoard licenses as they have in past. Perhaps this go around the government would have the guts to enforce the intent of the licenses, the marketing of exclusively 100 % Ontario wine.

-- A chance to market local wine to the Ontario customer would invigorate the rural economy. There would be no need to use the current greenwashing propaganda to convince customers that shipping foreign subsidized wine half way around the globe is somehow ecologically sound, that somehow it does not create a devastatingly large carbon footprint.

-- Customers could be given broader choice, better service and greater convenience. The LCBO would have to lose its arrogance and sense of entitlement. Let them prove that they are entitled to their Sunshine Law salaries by competing to serve their customers and dealing fairly with their suppliers.

Any improvement in access to our own markets would be welcome. Land based licenses would be a full loaf. A loaf of bread and a glass of wine shared with our fellow Ontarians would be poetry. Anything would be better than the crumbs we are being left as we watch foreign conglomerates and local bureaucracies eating our lunch, the lunch we work years and generations to earn, but somehow we do not get to enjoy.

~ Steve Kocsis, Owner/Winemaker

Mountain Road Wine Company, Beamsville.

John, wine lover
Ottawa, ON
I'm with Paul B from Toronto [comment #6] -- let's get with the program and come into the 21st century. It's time to fix Prohibition era thinking and control mentalities and adopt 2008 programming. The world has changed and so should the way of getting wine. The changes in the US since their 2005 Supreme Court decision has helped wineries and consumers, abuse doesn't seem to be a problem. Unfortunately, the "big brother" control mentality in this country is tough to shake and the current system is pretty comfy for provinces and their liquor boards.

A recent press report covered a KPMG study on the growing economic impact of the Ontario wine industry. The bottom line -- get more Canadian wine to more Canadian consumers more easily and we all benefit.

By the way, ever tried to use a private order program through a liquor board? S-L-O-W -- the LCBO even admits on its website it could take 3 months to get a case of wine from somewhere else in Canada. And for this type of service they levy a 58% mark-up? Sorry – time for a better mousetrap.

Mike, closet wine shipper
I have another angle on the problem. My sister recently moved from Alberta to Nova Scotia and she's asked that I ship a few bottles of wine that were left behind in the move. This archaic law makes it illegal for me to ship wine that was bought and paid for in Alberta to it's owner who now lives in another province. Insanity. Any amendment to the law should address the needs of individuals as well as wineries and liquor boards.

Allyson Bycraft, Editor
FoodMODE Magazine, Ottawa
I have recently been told by authorities at the LCBO that it is, in fact, NOT illegal to bring liquor over provincial borders for personal use.