Canadian court ruling hinders DtC wine sales

Ottawa, Ont.—The Supreme Court of Canada issued a unanimous ruling that the country’s constitutional provision providing for the free movement of goods does not supersede provincial restrictions to hinder the flow of beer, wine and spirits.

The court’s decision concerns the 2012 case of New Brunswick resident Gérard Comeau who traveled to Quebec to purchase cheaper beer and was cited by the Royal Canadian Mounted Police for bringing back more beer than is allowed under New Brunswick law. The province only allows a resident to bring in 12 pints of beer or one bottle of wine or liquor.

Comeau appealed the citation issued to him for carrying too much beer on the grounds that s.121 of the constitution allowed him to bring back as much Quebecois beer as he wanted. A lower court judge agreed and dismissed the charge. Provincial authorities appealed that ruling and the case made its way to the supreme court.

In making its 9-0 decision the court argued that nothing in Comeau’s case changed earlier decisions by the court to back provincial regulations. “For a binding precedent from a higher court to be cast aside, the new evidence must fundamentally shift how jurists understand the legal issue,” the court stated in its decision. “This high threshold was not met in this case.”

The ruling also indicates the court’s reluctance to further consider that the nation’s 1867 Constitution guarantees free trade without barriers and tariffs that impede the flow of wine and other goods such as soon-to-be legal cannabis. The restrictions have also resulted in legal challenges between provinces

The British Columbia Wine Institute (BCWI) issued a statement after the court’s decision saying it was disappointed as the ruling allows “unfair interprovincial trade barriers” to persist and such barriers have already “impeded Canada’s wine industry growth and prevented consumers from purchasing the Canadian wines of their choice.”

Miles Prodan, president and chief executive officer of the BCWI pledged the group will continue to work with elected officials at all levels of government to liberalize Canada’s wine markets and allow direct-to-consumer shipments across the country. “Removing restrictions would have opened the door to allowing consumers to order wine for direct delivery to their home from any Canadian winery located in any province,” he said in the press release. “We call that direct-to-consumer, it is something nine out of 10 Canadians believe should be permitted, and we now eagerly await the provinces making this choice available to their citizens."

The BCWI contends that for every $1 spent on Canadian wine in Canada, $3.42 in Gross Domestic Product is generated across the country.

"This morning's ruling is disappointing for our industry. Every wine producing nation in the world has direct sales within its own country" said Tony Stewart, owner and CEO of Quails' Gate Winery, in the BCWI statement. "Canada needs to correct this so that we can start to create a level playing field with the rest of the world."

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