Report - CETA Committee on Wines and Spirits

Brussels (and via videoconference) - 18 March 2025

The seventh meeting of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) Committee on Wines and Spirits was held on 18 March 2025 in Brussels. As usual, the parties welcomed the attendance of representatives of provincial and territorial authorities as observers to the meeting.

Performance of bilateral trade

The parties exchanged data and views concerning imports and exports of alcoholic beverages. In 2024, Canada imported CAD 1,727 million worth of European Union (EU) wine and CAD 424 million worth of EU spirit drinks, which represented growth of 7.2% and 1.75%, respectively. On the other hand, while imports of Canadian wine into the EU grew strongly by 12.3% (reaching EUR 1,863 million), imports of Canadian spirit drinks fell by 27.4% to EUR 12,753 million. Canada noted a decrease in consumption of alcoholic beverages in the country in all categories except cider. The EU pointed out that while a decrease in imports of Canadian spirit drinks was significant, this was also against the trend of declining imports and consumption of alcoholic beverages in the EU. Canadian wines, notably, bucked this trend.

Canada commented on the misrepresentation of various alleged issues raised in the draft external study supporting the ex-post evaluation of CETA. The EU explained that the report was being produced by a third party based on desk research and a wide stakeholder consultation, whereby all those concerned and available were invited to participate. Canadian officials noted that the CETA Wines and Spirits Committee Co-Chair was not interviewed, but the Canadian Government provided written comments it hoped would be taken into account. The external study, which examines the economic, social, environmental and human rights effects of CETA’s provisional application on both parties, is one of the elements which will be used as a supporting document for the European Commission’s ex-post evaluation on CETA in the form of a Staff Working Document.

Canada-EU cooperation on shared global challenges

Canada requested a discussion on the impact of the weaponisation of the alcoholic beverages’ sector in the current geopolitical context. Canada noted its response to the U.S. imposition of tariffs on Canadian goods is about protecting and defending Canada's interests, consumers, workers, and businesses. Most provinces have chosen to withdraw U.S. alcohol products from their respective liquor board shelves and catalogues, which could represent an opportunity for EU products to increase their market share, should the situation persist. In response, the EU emphasised its sympathy and support for Canada, while stressing that the situation might also represent an opportunity to address long-standing fiscal measures favouring local products in Canadian provinces. Canada noted the current geopolitical environment is challenging the assumptions underlying international trade and reinforcing the need to strengthen collaboration among friends and close trading partners. Canada further noted the importance of engaging with stakeholders from both sides to ensure Canadian and EU companies are aware of CETA and its benefits. Both sides agreed to explore the establishment of a group that would bring together representatives of the European Commission, Canadian federal government, as well as European and Canadian stakeholders to investigate concrete measures to improve bilateral trade.

Amendments to the 2003 Agreement on Trade in Wines and Spirit Drinks

The parties exchanged updates about the preparations for the entry into force of the Amendments to the 2003 Agreement on Trade in Wines and Spirit Drinks. Canada confirmed it has concluded the ratification process in Parliament, allowing the parties to exchange diplomatic notes and set the date for entry into force for 1 June 2025. Canada and the EU exchanged on possible geographical indications (GIs) and oenological practices to be taken into account for the subsequent amendment. The EU reported on the imminent publication for opposition of four GIs from Ontario and Québec. Assuming no opposition, the Canadian GIs would be considered for the subsequent amendment to the annexes of the 2003 Agreement. It was agreed that the Joint Committee established under the 2003 Agreement would seek to add relevant GIs that have received protection by December 31, 2025. Negotiations toward concluding the next decision of the Joint Committee will launch in early 2026.

Geographical indications

The EU enquired about the progress in the ongoing revision of the Canadian Food and Drug Regulations and reiterated its request that the term “champagne cider” be completely removed from the Food Compositional Standards document. Canada noted the Canadian Food and Drug Regulations have been updated on December 18, 2024, which will provide a more responsive and adaptable regulatory framework for food compositional standards. Canada explained that the Canadian Food Inspection Agency is working on an overall strategy to manage and prioritize requests for changes to food standards based on current resources.

The EU also enquired about whether any protection existed in Canada against unauthorised or misleading use of GI names under the Trademarks Act, particularly in cases of depreciation of goodwill. Canada clarified that depreciation of goodwill applied exclusively to trademarks, and GI names could be used in relation to non-like products. GI holders who considered their interests to be negatively affected were invited to address such concerns through the legal system.

Low and de-alcoholised wines

For the first time, the Committee held an exchange about market developments related to low and de-alcoholised wines. The EU and Canada reported on their respective regulatory frameworks and labelling requirements or guidelines. Canada clarified that in many provinces, products with an alcohol content level of 0.5% or below can be sold independently of the liquor boards, creating an opportunity for operators. Both sides agreed to produce a joint document to inform stakeholders of their respective regulatory landscapes.

Labelling

Canada once again raised the issue of implementation of nutrition and ingredient labelling mandated by the Regulation (EU) 2021/2117, at the Member State Level. Canada noted its disappointment with the outcome of the discussion of the expert group meeting (Group of Experts on Common Market Organisation for Wine and Spirit Drinks held on 5 February 2025).

The EU clarified that nutrition and ingredient information is only required to be provided in a single language. On this occasion, the EU provided an update on the development of the Wine Package, a new legislative proposal^{Footnote 1} that amends Regulation (EU) 2013/1783 (Common Market Organisation Regulation) with the purpose of implementing the recommendations of the High-level Group on wine policy, noting that some time will be required for the package to enter into force, and as such, Canadian operators should continue to collaborate with the EU importers to ensure label compliance. The purpose of the Wine Package is to introduce targeted measures to help the sector manage production potential, adapt to evolving consumer preferences, and unlock new market opportunities. The amendments would target measures to prevent surplus production and build-up of excessive wine stocks, increase producers’ flexibility as regards the rules related to replanting authorisation, give stronger support to climate related actions, improve conditions for marketing of innovative products, boost wine tourism and promotion. As regards e-labelling, it proposes to provide empowerment to the Commission to lay down further rules on e-labelling of wines and aromatised wines.

Canada also sought updates about harmonisation efforts linked to the labelling of alcoholic beverages to contribute to cancer prevention. The EU informed participants of the review of the “Europe’s Beating Cancer Plan”, clarifying that no new regulatory measures had been proposed. The Commission relayed its position that robust evidence would be required for any health warnings, noting that it is important to gather relevant research as needed.

Documents for the importation of wine into the EU

The EU provided an update on the correction of Commission Delegated Regulation (EU) 2018/273 as amended by Regulation 2019/840 as regards the import of wine originating in Canada. The EU reported that the regulatory process was almost complete, which would allow the inclusion of Canada in the list of third countries authorized to export their wine products to the EU using the simplified analysis report section of the Vi-1 document. Both sides discussed the requirements for the integration of Vi-1 forms into the Electronic System for Agricultural Non-Customs Formalities (ELAN), which would further streamline the procedure. The EU agreed to respond to more specific, technical questions in writing.

New varietals

Canada sought further discussion on how to ensure that Canadian varietals could be included on-label for wines imported into the EU. The EU reiterated that varietals available for labelling of GI wines are strictly limited to those listed in Annex V, Appendix 5 of the 2003 Agreement and no change is possible without treaty amendment. Both parties agreed to look for a suitable solution short of amending the Agreement, and in line with the respective EU regulations. Canada noted the EU has moved away from the practice of annexes for varietals in recent free trade agreements with Australia and New Zealand, and instead recognizes the lists contained by recognized international laboratories and the International Organisation of Vine and Wine (OIV).  

Mark-ups and taxes in Canadian provinces

Canada provided context about the ongoing geopolitical tensions resulting in greater uncertainty for its provinces and stakeholders, noting that resources at all levels of government are focused on relevant work as a result.

In Ontario, this has coupled with the ongoing reform of the alcohol marketing model and recent election. The EU underlined that while it had demonstrated good will towards stakeholders from the province by advancing two new wine GI applications, it nevertheless noted a setback in the elimination of the Ontario wine basic tax at on-site winery retail stores without a corresponding reduction in the fiscal component of the Liquor Control Board of Ontario (LCBO) mark-up applied to imported products. Canada explained that a targeted review of taxes and fees, as well as the entire wholesale pricing model, was under way in the province and gave assurance that concerns raised by the EU would be fed into the review. The EU invited Ontario to demonstrate good will towards EU operators.

The EU acknowledged Québec’s reply to the letters sent by the Commissioners in previous years and reiterated its demands to address the issue of differential tax rates for in-province brewers, small wine makers and craft distillers, benefiting from a generous eligibility limit to make use of the scheme. The EU referred to the positive work Québec had undertaken to address recent issues and noted that, for its part, the EU has advanced the applications of two new wine GIs from the province. Canada explained that Québec had been cooperative on issues that were feasible to address, including the elimination of differential mark-ups applied to Cognac and Champagne. The EU requested information on the number of active beneficiaries of the reduced mark-ups scheme.

Concerning Alberta, the EU pointed out the lack of reaction to the letter sent by the Commissioners, as well as what it saw as a deterioration of the differential treatment in favour of local producers, not least in the form of raising the annual worldwide production limit for small spirits manufacturers delivering directly to benefit from a discount. The EU reiterated its concern that the wholesale mark-up in Alberta represented origin-based discrimination. Canada responded by outlining the value embedded in the fee charged by the liquor board. The EU requested to consult the detailed structure of the service covered by the mark-up to determine whether it effectively included all the costs of getting products to market.

Regarding British Columbia, both sides acknowledged previously mischaracterizing a measure pertaining to the wholesale mark-up for small distillers. The EU noted that the measure is limited to local producers in British Columbia. Canada clarified that the scope of the scheme was very limited, noting that this category represents just above 1% of all spirit sales in the province, which could not affect the competitiveness of imported products. The EU reiterated its concern with the measure and expressed its eagerness to engage with the provincial authorities.

Similarly, the EU repeated its concerns about unresolved differential mark-up rates for in-province distillers and wine makers in Nova Scotia and New Brunswick. The EU reiterated its intention to engage directly with all concerned provinces.

Access to certain market outlets in Canadian provinces and territories

The EU reiterated their concerns with the development of different routes to market across the provinces which are inaccessible to its operators. In relation to the ongoing modernisation of the alcohol market in Ontario, the EU sought clarification of provisions related to the licensing of grocery and convenience store establishments and whether they would be allowed to sell imported wines. Canada responded that the modernisation would result in up to 8 500 additional alcohol sale licences being issued, creating new opportunities for sales of imported products.

The parties also discussed the ongoing work on the liberalisation of inter-provincial trade in alcoholic beverages and direct-to-consumer sales. Canada explained the reinvigorated discussion on removing internal barriers to trade in alcohol were at the behest of provincial governments and industry. While various options are being explored, jurisdictions within Canada would ultimately have different implementing parameters. The EU enquired about several inter-provincial trade deals concerning alcoholic beverages and reiterated its request to ensure that EU operators have the same level of access to any new routes to market as those available to local operators.

Other distribution and retail practices in Canadian provinces

The EU reiterated its concern with continued chargeback requests issued since the end of 2023 by the LCBO, enforcing a best price clause from their Purchase Order Terms and Conditions. The EU suggested that the suspension of chargeback requests could be a veritable gesture of good will from the LCBO and would contribute to reinstating confidence for EU operators to invest in the Ontario liquor market. Canada indicated that a court case related to the chargeback measure is ongoing.

The EU requested an update on the harmonisation of the payment terms applied by the LCBO, including a concrete timeline for solving this issue. Canada explained that, as part of its efforts to create efficiencies and improve payment and ordering processes, the LCBO is harmonizing payment terms for all products and suppliers in phases, and while the process is ongoing, Canada could not provide a clear timeline.

The parties exchanged on the policies concerning overpackaging and lightweight glass bottles in Ontario and Québec. The EU explained that, while it shares the overall policy objective, it is concerned by the arbitrary nature of the overpackaging measure and the case-by-case application of rules related to packaging and weight of liquor bottles, which in EU operators’ view gave undue advantage to the liquor boards and compromised transparency. The EU pleaded instead for comprehensive and generally applicable guidelines, concrete illustrations, as well as an exact definition of overpackaging. Canada responded by recalling the SAQ’s (Société des Alcools du Québec) record of transparency, flexibility and responsiveness while reaffirming the case-by-case approach to implementation of the policy. The EU suggested that technical issues related to packaging could be a valid topic for discussion in the proposed group including EU and Canadian business stakeholders.

The EU shared a list of concrete questions aimed at clarifying selected provisions of the Guidance to the Amendments to the Charter of the French language introduced by Bill 96 in Québec. The questions are aimed at addressing doubts as to whether certain labelling terms used in liquor products would have to be translated into French. Canada offered to respond to these questions in writing.

Any other business

The EU requested an official confirmation of the discontinuation of Nova Scotia’s Emerging Wine Regions policy.

The parties agreed to organise the next meeting in 2026, with Canada hosting.

Participants

European Union

Co-chair: European Commission, DG Agriculture and Rural Development, Head of unit The Americas
European Commission services: DG Agriculture and Rural Development, DG Trade, DG Health and Food Safety
Delegation of the European Union to Canada

Canada

Co-chair: Deputy Director, Technical Barriers and Regulations Division, Global Affairs Canada
Global Affairs Canada: Technical Barriers and Regulations Division, Mission of Canada to the EU
Agriculture and Agri-Food Canada: Technical Trade Policy
Provincial authorities: Alberta, British Columbia, Ontario, Prince Edward Island, New Brunswick, Newfoundland and Labrador, Nova Scotia, Québec, Saskatchewan, Nunavut, Yukon, Northwest Territories