Tuesday, September 9, 2008

B.C. wineries told not to ship wines across provincial lines

There are stupid rules in this country dating from times long before most of us were born. I can not believe that this is an issue and that anyone is being allowed to spend time on this! This is the sort of dumbass mindless rules that have to be gotten rid of.

Frankly, every regulation and rule should be regularly reviewed and checked to see if the idea makes any sense at all. This sort of thing makes me think government is an over rated idea.

Gordon Hamilton , Canwest News Service

Published: Tuesday, September 09, 2008

VANCOUVER - Authorities have clamped down on out-of province sales by British Columbia wineries to private customers, closing the door to a growing market niche for the province's popular wines.

The get-tough policy comes from the Manitoba and Ontario liquor control boards in response to wineries shipping directly to customers in those provinces.

Manitoba contacted the B.C. Liquor Control and Licensing Branch, prompting it to warn wineries that they must obey the 1928 Importation of Intoxicating Liquors Act.

Out-of-province sales to most provinces are illegal under the federal prohibition-era law. But sporadic enforcement and growing cross-country interest in wines from this province has tempted many wineries to ignore the antiquated law to satisfy customer demand.

It's the small, limited production wines that will be most impacted by the crackdown. Unless customers can drive to the winery, buying by phone or off the website is the only way to obtain the wine, said Scott Fraser, chairman of the B.C. Wine Institute. Because customers pay for shipping, it often costs them extra to get the highest-demand wines.

"Very often, it's our best products that are going out that way but in terms of total production or sales, it's a very small amount."

Fraser, who is with the Andrew Peller wine group, said one of the wineries in the company portfolio, Red Rooster, received a warning from Manitoba.

The Liquor Control Board of Ontario sent the second warning to Mission Hill Family Estate Winery.

Both wineries have stopped the private sales and Mission Hill has added a note to its website alerting customers to the restrictions.

But winemakers are unhappy that they are being denied access to the private-sales market. They can ship wine to customers in New York, but not in Ontario, said Mission Hill winery president Dan Zepponi.

The wine institute's board of directors is to raise the out-of-province ban at its board meeting later this week and the Canadian Vintners Association has mounted a lobby against the ban.

"It's a bit of a hot potato right now," said Shaun Everest, chair of the wine institute's marketing committee. "Our wines are growing in popularity and in demand. Making it less available for our customers is a step backwards.

"We would like people to be able to enjoy our wines right across the country," Everest said.

Other wineries are ending their out-of-province sales in response to the crackdown, he said.

"It's a winery-by-winery decision. I can't speak for everybody on how they plan to do it."

Everest, who is also chief financial officer at Tinhorn Creek, said a small percentage of sales are to out-of-province private customers. He said 15 to 20 per cent of the winery's sales are to out-of-province liquor control boards.

B.C. wine has grown to a $150-million-a-year business, but most of it is consumed within the province. By comparison, sales to the country's largest wine retailer, the Liquor Control Board of Ontario, amounted to $8.8 million last year.

LCBO spokesman Chris Layton said the board is obligated to ensure the law is obeyed.

"Whatever you think of a particular law, so be it. But as a government agency, we are required to remind our suppliers of the need to obey the law."

B.C. wine expert John Schreiner said the ban on interprovincial exports was originally to appease temperance movements. But today, he said, it's all about money.

Depending on the province, markups in provincial liquor stores can range from 50 per cent to 120 per cent, he said. Although the volume being shipped directly to private customers is small, Schreiner said liquor boards are getting nervous because of the growth both of the B.C. industry and of direct sales through websites.

"Liquor boards are getting a bit antsy because if the volume becomes substantial, they wouldn't be collecting their markups."

Under the Importation of Intoxicating Liquors Act, violators are subject to fines from $200 to $1,000 for the first two offences. After that, its imprisonment for six months to a year.

The act was passed after most provinces abandoned prohibition in the 1920s. Provincial liquor control boards, which were established to control liquor sales, enforce the act.

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