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Labelling wars heat up

|Written By Robert Todd

What many see as an honest attempt last week to boost Ontario’s wine and grape industry others view as an insidious attempt to block foreign competition.“This is going to be one of those x’s against Canada of a protectionist measure that we have put in place in the economic times,” says Cyndee Todgham Cherniak, a Lang Michener LLP international trade lawyer.

“We’re telling countries not to put in protectionist measures, not to engage in this type of behaviour. Well, this is an example of a protectionist measure that Ontario is taking.”

Her comments relate to Consumer Services Minister Ted McMeekin’s announcement that the province is changing its approach to the Vintners Quality Alliance appellation system, which distinguishes wines made with 100-per-cent Ontario grapes from blended wines using foreign grapes.

The plan calls for clearer labelling and signage for Ontario wines, an increased levy on blended wines, and a short-term increase in wines advertising the “cellared in Canada” label to contain 40-per-cent Ontario grapes, up from 30 per cent.

McMeekin said the moves will ensure “our wine and grape industry continues to succeed in the years ahead.”

He said they would help consumers understand the difference between wines produced only with Ontario grapes and those blended with fruit grown abroad in places like Chile and the United States.

But Todgham Cherniak suggests what is behind the plan is an attempt to keep foreign grapes out of the province and give preference to domestically grown grapes.

“That sounds kind of protectionist,” she says.

“It sounds like a disguised restriction on trade, and who do we get our grapes from? We get our grapes from the United States and we get our grapes from Chile and we have the NAFTA.

So we have a free-trade agreement with the United States. We’ve got a free-trade agreement with Chile. So this seems to be problematic from a trade perspective.”

But not everyone agrees with Todgham Cherniak’s view.

Cassels Brock & Blackwell LLP lawyer Lawrence Herman, who once led the economic and treaty law section at the External Affairs Department, doesn’t view the boost to grape growers as a trade issue. He says the moves are consistent with World Trade Organization requirements.

“Countries are allowed to apply labelling requirements like this. They’re not discriminating against foreign wines.

They’re just saying that if you want to be labelled as a VQA wine or a cellared in [Canada] wine, you have to meet certain requirements, and we’re going to strengthen the requirements that you have to meet. That’s quite all right.”

Todgham Cherniak, however, believes the government is making a mistake with its efforts to aid the grape growers. She points to British Columbia’s approach as more benign.

That province simply gives wines produced there preference on store shelves, an approach Todgham Cherniak says is more in line with trade agreements.

She speculates that Ontario’s tactic could be challenged at the WTO and also points to the potential hypocrisy of the Ontario wine labelling strategy.

That’s because Canada recently brought a case against the United States to the WTO based on similar country-of-origin labelling laws for meat products. Ottawa claims the U.S. law gives American beef and hog producers an advantage over Canadian competitors.

“So we’re doing something that we’re complaining to the WTO about that the U.S. is doing as a protectionist measure,” she says, adding she finds the move “very bizarre, unless Ontario is copying exactly what they’re doing and saying, ‘Well, you’re saying it’s OK, so it must be OK, so we’ll do it.’”

Todgham Cherniak also argues the move by Ontario was poorly timed given that it came during a week when representatives from the European Union visited Ottawa to discuss closer trade relations.

Part of the challenge for Ontario grape growers, however, is the fact that their product isn’t being purchased by local wineries because foreign grapes are sold at a lower price.

As a result, some of the bigger players in the Canadian wine industry are buying large quantities and negotiating price, thereby causing a dive in profit, says Todgham Cherniak.

“There are issues out there,” she says. “Whether or not it is at the Competition Bureau, I don’t know. If you go to Niagara-on-the-Lake for a weekend or [to] Beamsville, you hear rumblings of this issue that haven’t got much press. But I believe it stems from that - local grapes aren’t being used to the extent that they should be, so that there is a surplus of local grapes. So that’s one problem that the Ontario government is trying to solve.”

  • Food Product Labelling

    With the introduction of radio frequency identification technology, there's little difficulty for Canadian food/beverage processing industry players from identifying the area code/s of their food source ingredients--along with percentage if the Canadian source is only a portion.
    Adopting this labelling practice for food based products would give consumers the ability to see where the basic ingredients come from. Lets have labelling to inform consumers of the Canadian sources of the main ingredients included on their containers. Supporting imports or Canadian sourced ingredients is up to consumers to choose.
  • nonsense

    the issue is not grapes coming in from the US, as Todgham states. The issue is finished wine coming in from South Africa, Argentina and who knows from where.

    The imported wine is then put into an imported Bottle, with an imported cork cork and has a has a label put on to it. This wine is then placed on the Product of Ontario wine shelf with the label " cellared in Canada"

    The entire wine industry in Ontario is a nightmare, of over regulation, confused lawsand preferential advantages given to large corporations at the expense of the consumer and grape grower.
  • fruit grower

    It is not protectionist to notify the consumer of what is in the bottle. Bring in all the imported wine you want, but let people know where it came from. Don't bring it in from another country and tell the consumer that is trying to be patriotic that it is from Canada. Be Honest!
  • President Fairview Cellars

    Most other countries subsidize their farmers to the hilt. When this is rectified then by all means drop the protectionist tone, but until then we most certainly want our food production ability to remain viable. Or do we?
  • Be fair to the Consumer

    I don't buy the "anti-trade" stance pitched by T-C. As a purchaser of wine, I want to know what I'm buying. If I wish to buy a B.C. wine, or an Ontario wine, the label should help me do that rather than attempt to pass off some other country's wine as that of my province. I'm happy to let other's wine flow, but let people know where it comes from!!
  • Alcohol product labelling

    david dickinson
    Ontario should be concerned about the lack of warnings on liquor, beer, and wine packaging advising alcohol is associated with violence, can harm the fetus, and can cause permanent brain damage and alcohol-induced psychosis. The tobacco companies failed to adequately inform consumers of the risks of tobacco, now they are being sued for $50 billion. The Ontario government should take notice and rectify the problem before the government faces a massive class action law suit.
  • Andrew
    Todgham Cherniak is not very well-spoken for a lawyer.
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