Okanagan wine industry disappointed over USMCA-related grocery store sales changes

B.C.’s wine industry will soon lose its advantage of dedicated grocery in-store shelf space

Dirty Laundry winery in Summerland, B.C., estimates it will sell fewer bottles of red and white in grocery stores as shelf space previously reserved for local companies will soon be shared with U.S. imports.

“I don’t think it’ll be devastating, but it will certainly impact us,” said Paul Sawler, the winery’s director of sales and marketing.

B.C.’s wine industry will soon lose its advantage of dedicated grocery in-store shelf space — a practice deemed discriminatory through the lens of U.S. President Donald Trump’s America-first ethos — as grocers will have to make room for out-of-province offerings.

But with the Nov. 1, 2019 deadline for implementation more than a year away, those in the industry say it’s difficult to know what the change will look like and just how hard it’ll hit local vintners.

Imported wines currently can only be sold at the province’s grocery stores in a so-called store-within-a-store model, which the U.S. has called discriminatory and complained about to the World Trade Organization alleging unfair sales practices.

The U.S. and Canada agreed to end the “ongoing trade concern” in a pair of side letters to the new United States-Mexico-Canada Agreement reached late Sunday night.

The change is not surprising, but is disappointing, said Miles Prodan, the CEO of the B.C. Wine Institute, a not-for-profit organization that represents the interests of the province’s wineries.

READ MORE: U.S. president cheers new USMCA trade deal, heralds end of NAFTA era

There are 271 licensed grape wineries in the province, according to the institute, and the industry contributes $2.8 billion annually to the B.C. economy.

The majority of the wineries are small in scale, he said, producing about 5,000 cases a year or less.

The grocery-store model was the only real channel many of these smaller operations had to access consumers, he said.

“The growth of the sales for small wineries increased significantly,” he said.

“Prior to that, and it continues to be, very difficult for small wineries to access retail stores,” he said, adding everyone, including foreign wines, beer and spirits, is fighting for limited space within existing stores.

For Dirty Laundry, which this year will produce 30,000 cases, it’s not a critical source of sales, but an important market and the winery’s fastest growing one, Sawler said.

It accounts for 15 per cent of the company’s sales in the province, not including on the vineyard’s premises, he said. The company anticipates its sales in the channel will fall as a result.

“But how much it will impact us? You know, it’s anybody’s guess at this point,” he said, adding a lot depends on how the grocery chains handle the change.

The grocers themselves don’t yet know what the future will look like.

Only 29 grocery stores in the province sell B.C. wine in aisles as the practice requires a special licence.

Save-On-Foods offers provincial wine at 19 of its stores.

“We don’t believe this change in legislation will affect our operations and it definitely does not affect our long-standing commitment to supporting our local B.C. wineries and the B.C. agri-food industry,” the chain wrote in an email.

Loblaw Companies Ltd. sells B.C. wine at 10 of its stores, but doesn’t have any further licences and thus no plans for expanding the practice at the moment, spokeswoman Catherine Thomas wrote in an email.

The company doesn’t have enough information about the changes to provide any comment on how its in-store wine stock will change come November 2019, she said.

Aleksandra Sagan, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

VegFest drops Okanagan Ice Pops as sponsor

Controversy stirs over a bacon-chocolate flavoured popsicle

Kelowna company wins contract for LNG Canada project in Kitimat

SK Form & Finish will work with equivalent of 4,000 fully loaded concrete trucks

Kelowna Chamber of Commerce commends council on tough decision

Kelowna city councillors decided to leave short-term rental bylaw as is, for now

Kelowna event raises thousands for Central Okanagan Food Bank

A Taste of Downtown raised $9,000 for the food bank

City of Kelowna defeats short-term rentals ‘for now’

Kelowna councillors to protect long-term rental market in close vote

VIDEO: Showers are back in the forecast

Temperatures are expected to drop, paired with clouds and rain

Roadside device to weed out THC can’t detect impairment, B.C. lawyer says

‘This fact alone is likely to have serious implications for Canadians’ Charter Rights,’ lawyer Sarah Leamon warns

Sentencing for Okanagan man who sent Christmas card to shooting victim

A South Okanagan dangerous offender tacked on another nine months of prison time

Bizarre incident in Okanagan alley leads to arrest of Calgary man

A man was witnessed jumping on a car ‘acting like an ape’

VIDEO: Fire damaged Salmon Arm 7-Eleven demolished

7-Eleven representative says company interested opening elsewhere in Salmon Arm

Most British Columbians agree the ‘big one’ is coming, but only 50% are prepared

Only 46 per cent of British Columbians have prepared an emergency kit with supplies they might need

Kamloops RCMP bait program expands to include packages and bikes

Police are scatter items throughout the city in an attempt to lure thieves

Gucci Mane’s South Okanagan concert officially postponed

Agency is looking at new tour dates between the Sept. 3 and 15 in Penticton

B.C. man to pay Maxime Bernier’s People’s Party $20k over lawsuit

Federal judge shut down Satinder Dhillon’s ‘nonsensical’ motion to bar use of PPC name in byelection

Most Read