Canadian Wine Shipping Laws to Be Put to the Test

Radio host plans to cross provincial borders with wine, challenging a shipping ban
May 12, 2011

As the U.S. Congress debates the proposed CARE Act and the future of direct wine shipping, Canada is having its own battle over wine. A Canadian TV and radio personality is planning to engage in civil disobedience this week by transporting wine across provincial borders, which is illegal under Canadian law. Terry David Mulligan hopes to call attention to the country's ban on direct shipping between provinces, at a time when many in Canada's growing wine industry say the law should be reformed.

The law Mulligan will be challenging is the Importation of Intoxicating Liquors Act, passed in 1928 during Canada's prohibition period, which strictly forbids the transportation of alcohol across provincial lines. The law has been kept in place ever since, and critics complain it allows provincial governments to enjoy monopoly control over beer, wine and spirits sales, leading to massive tax revenues.

Mulligan, who lives in British Columbia and hosts a weekly wine radio show, plans to send a message on May 13 by carrying a case of British Columbia wines across the border to Alberta. He then plans to bring Ontario wines back.

"There are three things here that really bother me," said Mulligan, who faces potential fines of $200 for the first trip and $1,000 for the second offense. "It is a violation of our personal rights that you cannot take your own property from one province to another. It's a violation of the constitution as it affects the trade between provinces and it is totally counterproductive in the promotion of the Canadian wine industry across our country."

(This isn't Mulligan's first defiance of authority. He recently played a song that is banned by the Canadian Broadcast Standards Council. "Money for Nothing," by Dire Straits, has been barred from the radio in Canada due to lyrics the Council claims are homophobic.)

Canadian wineries have long complained that the transport ban effectively prevents them from doing direct business with Canadian consumers. Tourists visiting the Okanagan Valley in B.C. or the Niagara Peninsula in Ontario can't bring wine back home or have it shipped to them. The Liquor Control Board of Ontario (LCBO) recently demanded that Mission Hill Family Estate Winery of B.C. stop accepting out-of-province orders on its website.

While enforcement of the law is difficult, industry members have witnessed firsthand how some provincial alcohol control boards deal with outcry and defiance of the law. "These liquor control boards are hyper-sensitive to this issue, and some of them will not shrink from punishing wineries that speak out too much by taking their [wines] off the shelves," said a B.C.-based industry insider.

In a market where producers are reliant upon these provincial control boards as their only legal channel to sell their wines, having their products taken off shelves and away from consumers' eyes is a financial death sentence. Most producers who want to sell their wines in other provinces do not have production levels high enough to meet the volume demands of the control boards. Direct shipping would provide new customers.

There have been several reform suggestions, such as the implementation of a personal consumption allowance or a shipping permit system that would require the wineries to receive permission from provincial liquor control boards to ship their wine while provincial taxes are collected. Some have suggested that the law is unconstitutional due to liquor boards applying different markups and levies on wines sourced within their provinces, making the playing field uneven. No one has challenged the legality of the act yet, but Mulligan hopes his action will change that.

Direct Shipping Canada News

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