The Australian Government has complained to the World Trade Organisation (WTO) about “discriminatory rules” by Canadian authorities related to the sale of wine.

Australia claims that Canadian measures discriminate against imported wine and thus violate the WTO’s General Agreement on Tariffs and Trade (GATT) 1994, which the country is party to.

Specific complaints include British Columbia’s advantageous treatment of local vineyards. In British Columbia, local wine can be sold on regular store shelves. However, imported wine can only be sold in stores characterised as a ‘store within a store’, where some retail space within a store is run by another company; for example, petrol stations or supermarkets but not convenience stores. Imported wine is also subject to fees, taxes and mark-ups related to distribution, while local wineries can directly deliver their wine to consumers.

Australia argues that similar restrictions on imported wine exist in the provinces of Ontario, Quebec and Nova Scotia. In Ontario, conditions have been placed on imported wine in grocery stores which reduces the amount that can be displayed and thus limits sales of imported wine. Local Quebec wine producers have streamlined access to grocery and convenience stores, however, imported wines face many regulatory barriers. Nova Scotia has reduced product mark-up for local producers and encourages consumer preference for local wines through supplier competitions and price bands.

Authorities also singled out Canadian federal legislation that they contend discriminates against imported wine. Examples include the Federal Importation of Intoxicating Liquors Act 1985 and the Federal Excise Act 2001.

Australian trade minister Steven Ciobo explained the reason behind the government’s decision to begin the WTO dispute resolution procedure to the Australian Broadcasting Corp, saying: “In this case, we’ve got a number of provinces in Canada that are putting into place pro-protectionist policies. I’m not going to stand by and see Aussie exporters jeopardised.”

Canadian authorities have responded with the spokesperson for Canada’s international trade minister, Pierre-Olivier Herbert, stating that the Canadian federal government “works closely with all provinces and territories to ensure their liquor distribution and sales policies are consistent with our international trade commitments.”

The Winemakers’ Federation of Australia (WFA) were “delighted” saying “we respect the Canadian wine industry, but we are seeking a level playing field to ensure we can maximise our opportunities in this key market.”

A request for consultations represents the formal initiation of a dispute in the WTO. Parties then discuss the issue through the WTO and attempt to find a mutually satisfactory solution without the need for further litigation. Other WTO member countries can choose to join the consultation process. If after 60 days since the initiation of the request for consultations the dispute has not been resolved, then the complainant can request adjudication by a WTO panel. An adjudication could force Canada to change its legislation on the sale and distribution of wine or trade sanctions could be imposed.

This move by Australia follows and extends a complaint made by the US in the WTO about British Columbia’s wine legislation being biased towards local vineyards. This request for consultations was submitted on 28 September 2017 and remains in consultation. Australia, alongside other major wine-producing regions Argentina, the EU and New Zealand, joined and contributed to the consultation process. This WTO complaint came amid general trade disagreements between Canada and the US surrounding a potential re-negotiation of the North American Free Trade Agreement.