Can direct-to-consumer sales offset new U.S. tariffs for B.C. wineries?
British Columbia's wine industry is balancing hope and trepidation amid new U.S. tariff threats and a long-awaited movement to break down interprovincial trade barriers.
Amid trade threats from U.S., Canada moves to ease interprovincial flow of booze
In the wake of new U.S. tariff threats, the premiers of nine provinces, including B.C., have signed an agreement to allow out-of-province direct-to-consumer alcohol sales.
On Monday, U.S. President Donald Trump threatened new 50 per cent tariffs on a slew of Canadian goods, including wine.
Then, on Tuesday, the premiers of nine provinces, including B.C., inked an agreement to allow out-of-province direct-to-consumer alcohol sales — a key step toward the free movement of liquor across the country.
Doug Bell, owner of Northern Lights Estate winery in Prince George, said he was cautiously optimistic about the move.
“It’s great news, B.C. wineries have been asking for this for many, many years," he said on CBC's BC Today.
But he said "the devil is in the details," adding it's unclear how out-of-province imports will be regulated.
Smaller producers, he said, will be hardest pressed to handle red tape.
“They are the ones that don’t have the resources to be able to support all the legal obligations that will come inevitably from this type of endeavour," he said.
Jeff Guignard, president and CEO of Wine Growers B.C., said while premiers have signed an agreement in principle, they're still a long way from actually hammering out the legal framework.
That agreement, he added, still allows provinces to set their own markups and fees, which could result in a patchwork of regulatory systems — something his organization hopes to avoid.
“Just permit a customer to order a Canadian product from a Canadian producer and ship it across the borders," he told CBC's Daybreak South.
"Charge sales tax or whatever you need to, but we don’t need more red tape or reporting requirements here.”
James Donaldson, CEO of B.C. Food and Beverage, called the agreement a "great step,"
But he said premiers shouldn't stop at direct-to-consumer sales.
"We want to see B.C. products on Ontario liquor store shelves and vice versa, there’s so much opportunity for economic growth," he said.
Tariff troubles
While just a fraction of B.C. wines are exported to the U.S., the new tariff threats still have producers concerned.
The B.C. government said the province exports between $1 million and $3 million worth of wine globally, with between $200,000 and $700,000 of it heading south of the border.
"Most B.C. wine is enjoyed by Canadians," a Ministry of Agriculture spokesperson said in an email.
Bell's Northern Lights winery doesn't export to the U.S., but he said a large portion of B.C. wine that is sold abroad does go there.
He said the impact of a 50 per cent tariff would be to essentially price them out of the U.S. market.
“(It) will make the product non-competitive for the medium and long term," Bell said.
“We’ll just have to hope that it isn’t long lived.”
He said the situation likely won't put wineries out of business immediately, but highlights the importance of developing markets across Canada and overseas.
B.C. has signalled it aims to allow companies to sell directly to consumers by February 2027. However, there is no firm timeline for changes in other jurisdictions.
