Shipping US wine to Canada: FedEx gets in the game – and raises questions

An article on the Wine Law web site, an extremely interesting source on everything legal about how wine is sold (or not sold) within Canada, caused a bit of excitement among Canadian wine tweeps, today, as it revealed that FedEx has begun shipping wine directly from the United States to Canada – or at least, to Ontario, Alberta and British Columbia.

I’d heard a vague mention of that initiative, this week, and was glad to get the details today. I’d actually thought that it was interprovincial shipping that had been opened up, which would be even more interesting – and challenging for the monopolies.

Canadians who grumble about the hold that monopolies have on the Canadian wine trade could find reason to rejoice in this now officially approved means of getting wine where you want, when you want. Any opening in the monopoly is generally welcomed by consumers, around here. But if you’re in Canada, and already counting the bottles you’ll be ordering, don’t get too excited: it’s not that simple, and it’s not cheap.

Yes, you sill be able to order wines from your favorite US wineries, and have them sent to Canada. But you’ll pay full retail price in US dollars, to which all applicable taxes, duties and markups will apply – which means over 100% extra in Ontario and BC, though less in Alberta. And on top of paying double the retail price, you’ll have to pay shipping, which can run over 150$ for 6 bottles, judging from shipments I’ve received in Quebec over the last couple of years. So forget about getting any bargains that way. The monopolies are keeping all the revenues they would get otherwise, and they are not allowing actual competition from the US to take place.

With all these constraints, why should US wineries bother with sending cases across the 49th parallel? As the FedEx web site states: “Canada is the second largest U.S. wine export destination and is the only destination with double-digit wine growth in the last six years.” Good reason to try to increase shipments, for US wineries, especially as the Canadian economy is holding up better than the US economy. There’s more inventory to pick from, these days.

However, the process is not exactly simple or direct, as this flowchart from Fedex shows. “All it needs is tokens and dice to play”, chimed in winemaker Bradley Cooper when he checked it out after I tweeted the link. It does have something of snakes and ladders. Hearing the news, I’d originally thought that a sort of fast track process had been worked out between FedEx and the monopolies, but I now see that this direct shipping process is actually the same as the one I’ve worked my way through when getting wine sent to me to Quebec, through FedEx or other courrier services. You still have to ensure custom brokerage (which FedEx providesSo no big deal, as far as that is concerned.

Another interesting fact is that, according to tweets exchanged with Rod Phillips, this announcement came out of nowhere, even for BC wine industry people who are pushing for more open wine sales. Phillips mentioned that a lawsuit brought forth by Gallo may have something to do with it, but I haven’t found all the details on that case – hardly any, in fact. I will try to find out more.

There is, however, another legal challenge in the works regarding the prohibition of interprovincial shipping of wine, something which makes the apparent opening to international shipping seem stranger. While international trade rules forbid giving local products an undue advantage over international products, the reverse should also be true.

It’s a bit galling that you can get wine shipped directly to you from other countries (even though it’s expensive) while you absolutely can’t get it directly – legally, at least – from another Canadian province. If that uneven playing field was to be challenged successfully, it would mean big trouble for the monopolies. Many can’t wait to see that happen.

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6 Comments

  1. Posted November 30, 2009 at 12:16 am | Permalink

    Just the shipping cost would make it prohibitive unless one is buying collectibles at high dollar pricing.

  2. winecase
    Posted November 30, 2009 at 12:33 am | Permalink

    Absolutely, which is why this is such a limited opening. The interest for the monopolies is probably, in good part, to say that they are not preventing anyone from getting the wines they want – provided they are ready to pay the price.

  3. Posted November 30, 2009 at 5:18 pm | Permalink

    Particularly like your point in the final two paragraphs. I’m curious to see what, if any, changes come about as a result of this. Laws regarding wine around the world continue to baffle me.

  4. winecase
    Posted November 30, 2009 at 5:28 pm | Permalink

    Wine is certainly not the only case where the north-south circulation of goods seems easier than the east-west circulation. It’s one of the baffling things about Canada, sometimes. But in the case of wine, it seems particularly irritating, as Canadian wineries become disadvantaged, compared to their US competitors. Level playing field, anyone?

  5. Posted December 1, 2009 at 10:30 am | Permalink

    I came have the same problem. If I wish to send a box of 6 bottles to for example US, I must buy wooden box that protects the bottles and also shipping is around 100 Eur. I mean, not cheap right?

  6. winecase
    Posted December 1, 2009 at 11:51 am | Permalink

    Not cheap, indeed. One of the difficulties is that the postal services in Canada and the US will not carry alcohol. So there is no “slow but cheap” alternative to courier services, which are very expensive, on an international level.

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