Australia sticks its oar into US/Canada row over grocery wine sales
Australia has muscled its way into a growing World Trade Organisation (WTO) row between the US and Canada over the latter’s restrictions on the sale of foreign wine in its grocery stores.
The Australian government has asked to observe the forthcoming consultations between the two countries, citing its interest as one of the world’s top wine producers.
“Australia has substantial trade and commercial interests in this matter as a signnificant exporter of wine to Canada,” wrote the delgation in its brief WTO notification.
“Australia exported $193m in wine to Canada in the 2016 calendar year, making Canada Australia’s fourth largest export market for wine.”
Under WTO rules, members are allowed to join disputes as third party observers if they have “substantial interests” in the issue at hand, and those requests are nearly always granted. Statistics from the International Organisation of Vine and Wine show Australia to be the fifth leading wine producer in the world by volume.
In the brewing dispute, the US is challenging regulations that first arose in April 2015 which allows grocery stores in British Columbia to sell wine. The rules allow grocers to sell local wines, but require that wines from elsewhere to be sold in a segregated area. These cordoned off areas require retailers to set up wine stores with separate cash registers, but no grocery stores have done this, according to the Office of the United States Trade Representative, probably deterred by the high set up costs.
These restrictions have effectively denied American winemakers access to a new and growing retail channel, according to the U.S. "In British Columbia, the local wines get an unfair advantage because they can be sold on grocery store shelves, while US wines cannot," acting agriculture secretary Michael Scuse said when the case was first filed. "The United States simply seeks equal opportunities to market our wines, consistent with Canada's international obligations."
If the two countries cannot resolve the conflict through bilateral consultation, the US will be allowed to request that the dispute be adjudicated by a three-member WTO panel.