WT/DS537/1  
G/L/1209  
 
16 January 2018  
(18-0439) Page: 1/3 
  Original: English  
 
CANADA - MEASURES GOVERNING T HE SALE OF WINE  
REQUEST FOR CONSULTA TIONS BY AUSTRALIA  
The following communication, dated 12 January 2018 , from the delegation of Australia  to the 
delegation of Canada  and to the Chairperson of the Dispute Settlement Body, is circulated in 
accordance with Article  4.4 of the DSU.  
 
_______________  
 
 
My authorities have instructed me to request consultations with the Government of Canada 
pursuant to Articles 1 and 4 of the  Understanding on Rules and Procedures Governing the 
Settlement of Disputes ("DSU"), and Article XXII:1 of the General Agreement on Tariffs and Trade 
1994 ("GATT 1994"), with regard to measures maintained by the Canadian Government  and the 
Canadian provinc es of British Columbia  ("BC"), Ontario , Quebec  and Nova Scotia  governing the 
sale of wine.   
 
It appears that a range of distribution, licensing and sales measures such as product mark -ups, 
market access and listing policies, as well as duties and taxes on  wine applied at the federal  and 
provincial  level may discriminate, either directly or indirectly, against imported wine. In particular:   
 
 The BC wine measures provide advantages to BC wine through the granting of exclusive 
access to a retail channel of selling wine on grocery store shelves. The BC measures 
appear to discriminate on their face against imported wine by allowing only BC wine to be 
sold on regular grocery store shelves while imported wine may be sold in grocery stores 
only through a so -called "store within a store." The BC wine measures also provide 
advantages to BC wine through a separate distribution system for imported wine and 
another system that applies to BC wine.  Imported wine is subject to a wide range of 
mark-ups, fees and taxes, while BC wineries are permitted to "direct deliver "wine to 
consumers.  This system provides a substantial benefit to BC wines.  
 
 The Ontario  wine meas ures place conditions on both the sale of wine in grocery stores and 
its supply through the Liquor Control Board of Ontario (LCBO), a State Trading Enterprise.  
The Ontario measures appear to operate so as to favour products of Canadian origin and 
potentia lly exclude or limit imported products from being displayed and sold. It appears 
that the Ontario wine measures advantage Ontario wine by allowing Ontario wineries to 
directly deliver wines to licensed establishments in Ontario, on behalf of the LCBO.  
 
 The Quebec  wine measures provide Quebec small -scale wine producers with direct access 
to grocery and convenience stores.  The Quebec measures appear to streamline access in 
favour of Canadian wine, while maintaining barriers to access for imported wines.  
 
 The Nova Scotia  wine measures provide reduced product mark -up for local producers and 
preferences through supplier competitions and price bands.   
 
These measures are reflected in legal and policy instruments and practices that include, but are 
not limited t o, the following, operating separately or collectively:  
 
1. Federal Importation of Intoxicating Liquors Act 1985;  
 WT/DS537/1 • G/L/1209  
 
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  2. Federal Excise Act 2001;  
 
3. Policy Directive No. 15 -01, issued by the BC Liquor Control and Licensing Branch, re: 
Liquor Policy Review Recommendations #19 and 20: Phased -in Implementation of Liquor 
in Grocery Stores, dated February 26, 2015;  
 
4. BC Liquor Control and Licensing Act ([SB C 2015] Chapter 19), succeeding the BC Liquor 
Control and Licensing Act ([RSBC 1996] Chapter 267);  
 
5. B.C. Reg. 42/2015, deposited March 17, 2015, amending BC Liquor Control and Licensing 
Regulation, B.C. Reg. 244/2002; Order in Council 121/2015, approved an d ordered March 
16, 2015; British Columbia Gazette, Part II, Volume 58, No. 6 (March 24, 2015);  
 
6. BC Liquor Control and Licensing Regulation, B.C. Reg. 241/2016, deposited October 20, 
2016, effective January 23, 2017, succeeding BC Liquor Control and Licens ing Regulation, 
B.C. Reg. 244/2002;  
 
7. "Wine Store Terms and Conditions," BC Liquor Control and Licensing Branch publication, 
updated August 2017;  
 
8. Special Wine Store Licence Auction Act and regulations of 2015 [SBC 2015] Chapter 20 
(British Columbia);  
 
9. British Columbia Wine Store Handbook, January 2017;  
 
10. "Manufacturer Terms and Conditions, "BC Liquor Control and Licensing Branch publication, 
December 2017;  
 
11. British Columbia Vinters Quality Alliance system, including British Columbia Wines of 
Marked Quality R egulation and creating the "BC VQA "appellation of origin;  
 
12. British Columbia Liquor Distribution Act [RSBC 1996] Chapter 268;  
 
13. Mark ups, fees and taxes through the British Columbia Liquor Distribution Branch;  
 
14. Ontario Liquor Licence Act [R.S.O. 1990, Chap ter L.19] and Regulations;  
 
15. Ontario Liquor Control Act [R.S.O. 1990, Chapter L.18] and Regulations;  
 
16. Ontario Regulation 232/16 regarding the sale of liquor in government stores under the 
Liquor Control Act;  
 
17. Ontario Alcohol and Gaming Regulation and Public Protection Act, 1996, S.O. 1996, 
Chapter 26;  
 
18. Mark ups, fees and taxes through the Liquor Control Board of Ontario and the Alcohol and 
Gaming Commission of Ontario, including those listed in the 2016 Ontario  Budget;  
 
19. Chapter P -9.1 An Act respecting liquor permits (Quebec) and Regulations, including:  
 chapter P -9.1, r. 6 Regulation respecting promotion, advertising and educational 
programs relating to alcoholic beverages;  
 
20. Act respecting the Société des alcools  du Québec and Regulations, including:  
 chapter S -13, r. 5 Regulation respecting the duties and costs payable under the 
Act respecting the Société des alcools du Québec;  
 chapter S -13, r. 7 Regulation respecting wine and other alcoholic beverages made 
or bottled by holders of a wine maker 's permit; Act respecting the Société des 
alcools du Québec (chapter S -13, ss. 30 and 37); and  
 chapter S -13, r.6 Regulation respecting the terms of sale of alcoholic beverages by 
holders of a grocery permit in the Act respe cting the Société des alcools  du 
Québec;  WT/DS537/1 • G/L/1209  
 
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21. Legislation and regulations enacted as a result of Bill 88: An Act respecting development of 
the small -scale alcoholic beverage industry (Quebec);  
 
22. Act respecting the Quebec sales tax and Regulation respecting the Quebec sales tax;  
 
23. Mark ups, fees and taxes through the Société des alcools du Québec;  
 
24. Liquor Control Act of Nova Scotia and Regulations; and  
 
25. Mark ups, fees and taxes through the Nova Scotia Liquor Corporation  
 
as well as any amendments or successor, replacement, or implementing measures.  
 
These measures appear to be inconsistent with Canada 's obligations pursuant to Articles III, XVII 
and XXIV:12 of the GATT 1994.  
 
 Article III:1 and III:2 of the GATT 1994 becau se they are internal taxes or other internal 
charges of any kind applied to products imported into Canada in excess of those applied to 
products of Canadian origin, so as to afford protection to products of Canadian origin.  
 
 Article III:4 of the GATT 1994 because they are laws, regulations, or requirements 
affecting the internal sale, offering for sale, purchase, or distribution of wine and fail to 
accord products imported into Canada treatment no less favorable than that accorded to 
like products of Canadi an origin.  
 
 Article XVII:1 of the GATT 1994 because the provincial liquor control boards/commissions 
of British Columbia, Ontario, Nova Scotia and Quebec, as State Trading Enterprises, are 
not acting in a manner consistent with the general principles of n on-discriminatory 
treatment prescribed in the GATT 1994 for governmental measures affecting imports by 
private traders.  
 
 Article XXIV:12 of the GATT 1994 because Canada has not taken reasonable measures as 
may be available to it to ensure observance of the  provisions of the GATT 1994 by the 
regional and local governments and authorities within its territories.  
 
We look forward to receiving your reply to the present request and to fixing a mutually convenient 
date for consultations.  
 
 
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