Agreement with Australia | Fitzgerald promises to “control the damage” to winemakers

Agreement with Australia |  Fitzgerald promises to "control the damage" to winemakers

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Gabriel BelandGabriel Beland
Press

This deal Press Content for new charges on Quebec bottles sold at grocery and convenience stores was revealed Friday. Grocers fear the move could have an impact on local wine sales.

“This is ‘bad news’ […], But we have no choice. For now, it is up to us to put in place plans to control the negative effects as much as possible, ”says Pierre Fitzskien, Quebec’s Minister of Economy and Innovation.

Australia filed a complaint with the World Trade Organization (WTO) in 2018. He believed that Canada and many provinces were unnecessarily supporting local wine producers, thus violating the principles of free trade. Many more wine-producing countries came to support his complaint.

Ottawa and other affected provinces of British Columbia, Ontario and Nova Scotia both came to an agreement with Australia. Quebec was the last to do so. The deal came last winter, but was not released until this week.

Up to $ 6 a bottle

Why did you agree to negotiate?

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Quebec’s Minister of Economy and Innovation Pierre Fitzkiban

If the World Trade Organization had made its recommendations, prices would have been much higher. ”

Quebec’s Minister of Economy and Innovation Pierre Fitzkiban

The Minister explains that the Quebec producers representing Conceil des Vince du Quebec (CVQ) initially rejected negotiations with Australia.

“CVQ has called on Quebec not to interfere and to allow the World Trade Organization to decide […] But I think they felt there was a risk, says Fitzgerald. They changed their minds in 2020 and sought a negotiated solution. I think this is a good decision. ”

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The deal provides for the introduction of tariffs on local wines sold in grocery stores and convenience stores, a sector that has experienced strong growth in recent years. The measure will take effect in December 2023.

Since 2016, Quebec wine growers have been able to sell their bottles directly at grocery stores and convenience stores. To deliver their wines on the same shelves, foreign manufacturers have to go completely through SAQ, which imposes a significant “mark-up” on them.

Mark Andre Cognon, a journalist and columnist for the WinCube.com site, fears that “Quebec wine will run out in grocery stores if Quebec does not provide subsidies.”

This avid wine display visitor mentions that the fee is $ 6 per bottle. However, the government has not yet stated how much the “extra charge” will be for Quebec wines.

“Now by selling in grocery stores, the manufacturer does not have to pay mark-up mark 6 to SAQ. He can come to an agreement with the grocery store and sell him a bottle of SA 5 for $ 8, as he would like in SAQ, for example, Mr. Cognon Explains.

This is very different. There, all of a sudden, by mark-up, he has to sell his wine at the grocery store for $ 11, but he’s only going to get $ 5. It is not profitable for him.

Mark Andre Cagnon, a journalist and columnist on the Quebec.com website

If nothing else, Mark Andre Cognon thinks many wine growers will want to sell their bottles in the garden.

Disappointed grocers

Pierre Fitzgerald says he is well aware of this problem. The minister did not want to reveal his game. He also did not want to talk about “compensation”. But this leaves the winemakers with an opportunity for a kind of help.

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“We can not say that we are compensating for the tax, because we will indirectly do what we can not do directly. I will not tell you that we are going to compensate them, it will be a lack of ethics on my part,” said Mr. Fitzgeb.

“But the projects we’re going to implement in a year, a year and a half will at least alleviate things,” he assures us.

What we told CVQ was that we were going to minimize the “damage” […]. We will find a way …

Quebec’s Minister of Economy and Innovation Pierre Fitzkiban

The federal budget presented this week provides $ 101 million over two years to “help wineries meet current and growing challenges.”

Meanwhile, grocers are eager to see how the situation unfolds. The Food Retailers Association of Quebec (ADAQ) recently noted the real excitement over Quebec wine.

“We sold everything last year. We’re out of production, ”said Pierre-Alexandre Bluin, president and CEO of ADAQ.

“As a result we are disappointed. We do not have all the details yet, but unfortunately there is no point in creating short circuits between retailers and producers,” he believes. ”

He fears that local wines will run out in grocery stores and convenience stores, which will ultimately benefit foreign vineyards. “If a customer chooses an Australian wine for $ 12 and a Quebec bottle for $ 27 … it will be hard.”

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About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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