Alberta strikes again

Photo: Grapes in Okanagan vineyard

Without warning, Alberta Gaming, Liquor and Cannabis has told British Columbia wineries that they should stop shipping wine directly to consumers in Alberta. Numerous wineries recently received this threatening letter from AGLC:

Alberta Gaming, Liquor and Cannabis (AGLC) recently conducted an investigation into suppliers/manufacturers providing DTC shipping of liquor products to Alberta residents in contravention of: • Section 3(1) of the federal Importation of Intoxicating Liquors Act; • Sections 50 and 77 of Alberta’s Gaming, Liquor and Cannabis Act; and, • Section 89 of Alberta’s Gaming, Liquor and Cannabis Regulation. We are writing to advise that our investigation found tangible evidence of [your winery’s] involvement in DTC shipping of wines across provincial borders into Alberta. To maintain the integrity of Alberta’s liquor model and to protect the interests of Alberta retailers and liquor agents, AGLC will not accept any inbound shipments from [your winery] from this date forward. Shipments enroute to Alberta’s central warehouse prior to this notification will be accepted, and sell-through of current inventory will continue. Inbound shipments received after January 22, 2024, will be refused. There is an open and extensive opportunity for vintners to market their products to Albertans, and AGLC is supportive of continued distribution of your product through legal channels. We will resume acceptance of inbound shipments if, by way of written notice (via email to DTCshipping@aglc.ca), [that your winery] agrees to immediately cease DTC shipping operations to Alberta.

AGLC oversees the legislative and regulatory aspects of the gaming, liquor and cannabis industries in Alberta. To help ensure integrity and a level playing field for industry, we engage with stakeholders to provide ongoing policy education and continually monitor compliance through random and covert investigations. Continued non-compliance by liquor suppliers/manufacturers may result in further action.

It is déjà vu all over again for British Columbia wineries. In early 2018, John Horgan, then the premier of British Columbia, threatened to restrict the movement of Alberta bitumen into British Columbia. Rachel Notley, then Alberta’s premier, responded by banning the import of British Columbia wine, including DTC shipments. The ban lasted two weeks before Horgan backed down. Since that time, a Supreme Court of Canada decision involving a New Brunswick consumer bringing in beer from Quebec confirmed that alcohol cannot move freely across provincial boundaries unless the provinces have specifically allowed it. Subsequently, Saskatchewan, Manitoba, British Columbia and Nova Scotia have opened their borders to direct-to-consumer shipments of alcohol. Manitoba allows shippers to remit relevant taxes to the province. There has been federal legislation initiated by a British Columbia member of Parliament which purports to eliminate provincial barriers to the movement of alcoholic products. As well intentioned as that is, the manufacture and sale of alcoholic products is a provincial responsibility.

It is hard to say what got the AGLC agitated. In a statement, Miles Prodan, chief executive of Wine Growers British Columbia, said: “While we are still unclear of the political motivation behind the recent AGLC letter, it is disheartening for our local growers and producers, who have already suffered great financial hardships over this past year. We are concerned of being targeted once again for political gain that has nothing to do with our industry.” “In Alberta, where it was once permitted to ‘import’ liquor from other Canadian provinces for personal consumption, the regulations were amended to make importation from other provinces subject to the policies of the Liquor Control Board,” the Wine Growers statement continues. “Currently, personal consumption is restricted to liquor that is also personally transported which eliminates shipping as an option. This prohibits Albertans, many of whom frequent BC as tourists, from joining wine clubs or ordering wine directly when visiting a winery outside of the province.” The legality of this is dubious. Prodan continues: “Currently AGLC jurisdiction is limited to regulating persons and activities within the province. The Alberta laws governing DTC Shipping are all designed to regulate consumer activities – their authority does not extend to BC manufacturers exporting wine into the province.”

The practicality of such a ban is even more dubious. At this time, British Columbia wineries do not have a lot of wine to ship. The 2023 vintage was half the expected quantity because of the extensive vine and bud damage last winter. The recent severe cold snap in the Okanagan means reduced production in the 2024 vintage, and beyond. British Columbia wineries will be disappointing many markets beyond the BC borders.

Even so, the AGLC position is an infuriating echo of Prohibition-era regulations from 100 years ago. Then, the object was to make it as inconvenient as possible to drink. Today, it for each province to squeeze every possible nickel of tax from alcohol. It has nothing to do with protecting retailers, as if they need protection. Wine Growers of British Columbia has retained a lawyer; and the Solicitor of British Columbia has said it is “actively engaging with the government of Alberta to address the issue …” I will drink to that.