The federal government has initiated formal World Trade Organisation (WTO) dispute settlement action against what the local wine industry argues is Canada’s clearly discriminatory measures against Australian wine.
Some Canadian provinces are restricting the sale of imported wine in grocery stores while discounting local product prices.
Canada is Australia’s fourth largest wine export market worth about $185 million a year.
It is the first time Australia has initiated formal WTO action in 15 years.
The US began its own WTO action last year, while New Zealand and Chile could join Australia in the dispute-settlement campaign.
Trade, Tourism and Investment Minister, Steven Ciobo, said Australia had taken the first step in commencing formal consultations with Canada regarding measures the government felt imposed arbitrary and disadvantageous restrictions on imported wine, inconsistent with WTO obligations.
“The step responds to concerns from the Australian wine industry regarding the Canadian measures, which negatively impact trade with our fourth largest export market,” he said.
“Australia strongly supports the multilateral trading system, with the WTO at its heart.”
He said one of the key strengths of the WTO was its disputes system, which ensured WTO members comply fully with their commitments.
“While it would have been preferable to resolve this issue bilaterally, it was appropriate to commence dispute proceedings given the lack of progress,” he said.
The Winemakers' Federation of Australia welcomed the government’s formal action against Canada in the wake of intensive lobbying by the local industry.
Chief executive officer, Tony Battaglene, said the anti-competitive actions arose because provincial governments owned the statutory authorities which sold and distributed wine within their own states.
He said these government monopolies directed revenue back to provincial government coffers.
Discriminatory practices included putting ceiling prices on local wine product and lifting the mark-up value on imports, as well as offering exclusive access to retailers and restaurants for Canadian brands.
The story Australia hits out at Canada’s wine market prejudices first appeared on Farm Online.