Australia and Canada Are in a Wine War

In an unusual move, Australia has filed a formal complaint with the World Trade Organisation (WTO) against Canada, claiming its trade policies discriminate against imported wine. Australia is arguing this is a breach of the WTO’s guidelines.

The complaint was filed by Australia’s trade minister Steve Ciobo after negotiations between the two countries fell apart. Australian winemakers say the extra taxes, fees, and requirements Canada imposes on imported wine are unfair. This includes grocery stores being required to sell foreign wine in a separate “store within a store.” Ciobo claims this “protectionist” approach has resulted in an "erosion" of "liberalised market access" into Canada.

Australia’s attempts to force action from Canada follow those of the United States, which complained in October that the Canadian province of British Columbia was unfairly favouring its own local vineyards. However, Australia has expanded criticism to include Ontario, Quebec, and Nova Scotia.

Natasha Nystrom, a trade spokesperson for the Canada said the regulation of alcohol isn’t an issue for the federal government, and instead was decided by each individual province. "The government works closely with all provinces and territories to ensure their liquor distribution and sales policies are consistent with our international trade commitments and will continue to give careful consideration to a request for consultations from any WTO member,” Nystrom said.

The Turnbull Government's actions are unsurprising, considering wine is one of Australia’s most lucrative exports generating $2.17 billion a year. Sales of Australian wine to Canada have halved in the last decade, but it remains the fourth largest export market after China, the United States, and Britain.

Canada now has 60 days to resolve the dispute with Australia, and avoid an adjudication with the WTO that could result in trade sanctions.