The deal ends Alberta’s ban on direct-to-customer sales from B.C. wineries
A cross-boundary wine dispute between B.C. and Alberta appears to be nearing its end after the two provinces announced a deal Tuesday that will allow West Coast wineries to resume selling directly to customers.
The two governments have reached a memorandum of understanding that ensures B.C. wineries “pay their fair share of fees from liquor sales in Alberta.”
The deal effectively ends a temporary ban imposed by Alberta on direct-to-customer sales that came about in late January.
B.C. Premier David Eby appeared alongside Alberta Premier Danielle Smith at a news conference Tuesday in Halifax where the two are attending the Council of the Federation meetings that wrap up Wednesday.
“There are lots of Albertans who love B.C. wine,” Smith said.
“We heard a lot from them about how they wanted this direct delivery restored.”
Eby hailed Tuesday’s news as well, acknowledging the provinces had gone through a “challenging time.”
“We’re going to have ups and downs to our relationship. The spirit of collaboration, though, is going to endure,” Eby said.
Details on how the deal will be administered will be worked out in the coming weeks, although direct-to-customer sales can resume, effective immediately.
Alberta had taken issue with wineries in B.C. selling directly to customers, asserting that model skirted tax rules.
Direct wine shipments have resumed under the deal, which is scheduled to last for one year when it will be re-evaluated by the governments.
“This is just a way in which the markup was not being collected,” Smith said. “We think you need to have fair treatment if you’re going to be selling into our market. You have to be treated the same as every other person who is buying it through a liquor store.”
The stoppage earlier this year affected wineries and wine clubs, which rely on direct sales by having customers subscribe to receive regular, periodic shipments of small-batch, artisanal wines.
The pause took a toll on the bottom lines of wineries and left wine clubs dry for the time being.
“It’s a rather big impact on us,” Paul Sawler, a vice-president of sales and marketing with a Summerland, B.C. winery, told Postmedia earlier this year.
“It has the potential to cost us almost a quarter of a million dollars in sales a year.”
Conversely, some Alberta wine retailers took the government’s side, pointing out they had to pay taxes on B.C. wine that would be passed on to customers, whereas direct-to-customer buyers and sellers were able to avoid those taxes.
Some B.C. wineries said they were open to paying any Alberta tax, but that there was no mechanism to do so at the time.
Eby said that too is being worked on.
“We’ll get it done and it’ll be effective and minimize that bureaucratic red tape.”
— with files from Michael Rodriguez