There is an old saying that if you want to understand any political controversy, “follow the money.”
That’s certainly true in the latest BC-Alberta wine war.
Remember the kerfuffle back in 2018 when Alberta banned the import of BC wines in retaliation for BC not supporting the Trans Mountain pipeline?
Well, the wine wars are happening again, but this time, it isn’t about oil and gas; it’s about taxes, liquor taxes, to be precise.
Alberta feels it’s missing out on collecting booze revenues from BC wines that are shipped directly to Alberta consumers.
Is Alberta just whining, poking its nose into another province’s business, or does the government have a legitimate gripe?
What’s Up?
The Alberta government, through its Alberta Gaming, Liquor and Cannabis Commission (AGLC), has announced stringent enforcement against direct-to-consumer (DTC) wine sales from British Columbia wineries.
Direct-to-consumer sales include wine subscriptions and wine clubs, where wineries or a collection of wineries sell ‘mail-order’ wine directly to consumers.
A lot of Albertans love to order BC wine online because often their favourite wines are unavailable in liquor stores.
The government of Alberta sent a letter to BC wineries involved in direct-to-consumer wine sales.
The letter said, “Our investigation found tangible evidence of [your winery’s] involvement in [direct-to-consumer] shipping of wines across provincial borders in Alberta,”
The letter went on to say:
“To maintain the integrity of Alberta’s liquor model and to protect the interests of Alberta retailers and liquor agents, AGLC will not accept any inbound shipments from [your winery] from this date forward. We will resume acceptance of inbound shipments if, by way of written notice, [your winery] agrees to immediately cease [direct-to-consumer] shipping operations to Alberta.”
So, in effect, wineries in BC need to stop shipping wine directly to Alberta customers, or Alberta will stop stocking their booze in Alberta liquor stores.
Alberta’s stringent measures have sent ripples through the BC wine industry, which was already grappling with the adverse effects of wildfires and severe weather conditions.
Alberta’s Why’s
The AGLC’s decision is grounded in the desire “to maintain the integrity of Alberta’s liquor model.”
By prohibiting the direct shipping of wine to Alberta residents, the commission aims “to ensure that all alcohol sales within the province pass through regulated channels, thereby allowing for proper oversight, particularly in ensuring sales are made only to adults over the age of 18.”
We wonder if many minors under 18 years old are buying expensive cases of wine from BC.
But maybe the Alberta government has special intelligence on this matter?
The following statement reflects Alberta’s reasoning more accurately: “This policy aims to protect the revenue generated from alcohol sales, which contributes to Alberta’s general revenue fund.”
The BC Winery’s Take
For BC winemakers, this directive from Alberta could not have come at a more challenging time.
The industry has been reeling from the impact of the extreme cold snaps that have significantly reduced grape production, potentially by up to 60 percent for the 2023 season, according to John Skinner of Painted Rock Estate Winery.
With many wineries facing the costly prospect of replanting crops, the prohibition on DTC sales to Alberta, a vital market for many of these wineries, adds additional financial strain.
It’s a sentiment echoed by Michael Alexander of Summerhill Pyramid Winery, who noted the importance of Alberta wine drinkers’ support for the sustainability of their operations.
Critics of the Alberta government’s stance, including lawyer Al Hudec representing BC winemakers, argue that this measure is both aggressive and unfair, suggesting that it imposes Alberta’s regulations onto another province without legal precedent.
The irony, of course, is that the Alberta government hates it when any other jurisdictions muscle into their business.
Furthermore, Alberta’s move is seen as detrimental to the spirit of interprovincial cooperation and commerce, particularly given that direct sales have been a significant part of the Canadian wine industry’s business model, especially for boutique operations that rely on DTC sales for a substantial portion of their revenue.
Alberta Stands Firm
On the other side of the argument, Dale Nally, Alberta’s Minister of Red Tape Reduction, defends the policy as a necessary step to “ensure that Alberta’s tax and regulatory frameworks are respected.” The irony is that, in this case, the new liquor rules effectively add red tape,
Nally emphasizes that the issue at hand is not about market access but about ensuring that BC wineries contribute their fair share to Alberta’s coffers through the existing markup on alcohol sales.
He suggests that a compromise could be reached if BC wineries agree to pay the taxes that come with selling their products in Alberta.
Consumers Suffer Again
These new rules have broader implications for consumers and the wine industry across both provinces.
For Alberta consumers, this could mean reduced access to a diverse range of BC wines, particularly those not available through traditional retail channels.
It also means price increases for BC wines that make it across the border to Alberta.
For BC winemakers, Alberta’s move represents a significant hurdle in reaching their clientele, potentially affecting their bottom line and limiting the growth of their businesses.
Here at The Rockies Life, we wonder why the Alberta government did not bring the issue to the table for discussion and resolution, rather than sending out threatening letters and imposing draconian measures on an industry already suffering from crop losses and inflation.
If another province did that to our farmers, there would be hell to pay!
This issue also highlights the tendency of Premier Smith’s government to shoot first and ask questions later.
The situation underscores a broader debate on the balance between provincial autonomy in regulating alcohol sales and the desire for a more unified Canadian market that allows for the free flow of goods across provincial boundaries.
Enjoy those last bottles of boutique BC wines hidden in your basement.
Cheers!
