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(Last updated: 16 Jul 2007)
Trends and opportunities
The market
The Canadian market for imported wine and spirits operates in a highly regulated environment and is characterised by government monopolies.
Nationally, the wine market shows a preference for imported over domestic products. Sixty-nine per cent of the volume of white and red wines purchased is imported.
The Canadian market for Australian wine continues to show strong growth – Canada is our third largest wine market (by dollar value). Australia holds about 12 per cent of the red wine market and approximately seven per cent of the total market for white wine
Over the last decade, the reputation and popularity of Australian wines has been significantly elevated in the Canadian market. This has occurred for a number of reasons:
- Australia continues to benefit from an overall trend toward New World Wines
- The exceptional quality of Australian wine and their ability to offer consumers value for money
- Increased consumer demand
- The development of Australian Wine Societies
- The Liquor Boards’ promotion of Australian wines in various provinces
- The promotional programs implemented by Austrade and the Australian Wine Bureau
- Media coverage and increased interest in the market by Australian exporters
All these factors have been recognised by provincial government liquor importing organisations, which have over time changed their policies accordingly and are now ordering Australian wines in greater quantities and variety.
Opportunities
Notwithstanding the government involvement in the liquor industry in Canada, the market is an excellent one for Australian wine exporters and continues to deliver good results for suppliers.
Competitive environment
The top exporters of bottled wine to Canada (including Australia) are: France, Italy, USA and Chile. In addition to these countries, Australia’s competition also comes from suppliers such as Germany, New Zealand and South Africa. |
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Tariffs, regulations and customs
The Canadian market for imported wine and spirits operate in a highly regulated environment characterised by government monopolies. Provincial Liquor Boards have sole authority to import wine into Canada.
With the exception of the Alberta Gaming and Liquor Commission, which has privatised its entire retail network, the other provincial liquor boards import, warehouse and distribute imported wines through their various retail outlets.
While similar in operation, each Liquor Board has its own procedures and regulations governing the listing, pricing, packaging and promotion of wine to which suppliers must adhere.
It is the responsibility of the manufacturer or importer of the alcoholic beverage to ensure that a label is in compliance with both the Food and Drug Regulations and the Consumer Packaging and Labelling Regulations.
The Canadian Consumer Packaging and Labeling Regulations stipulate that all ‘mandatory’ label information must be shown in English and French, except the manufacturer’s name and address, which can appear in either language.
Mandatory information which must be shown in English and French includes:
- Common name by which the beverage is known
- Net quantity – must be shown in metric units of volume
- Alcohol by volume declaration
The government of Canada levies four distinct taxes on distilled spirit products:
- Customs import duties – levied on spirit products imported into Canada
- Customs duty – equivalent to excise duty, levied on spirits imported into Canada
- Excise duty – levied on domestic spirit products
- Goods and services tax (GST) – levied at seven per cent of retail price
- In addition imported wines are also subject to provincial levies, taxes and mark-ups.
Industry standards
All products imported in to Canada must comply with:
- Canadian packaging and labelling regulations
- The Canadian Association of Liquor Jurisdictions product identification standards for use in the distribution of beverage alcohol (standards for the use of the Universal Product Code (UPC) or EAN bar codes, in the distribution of beverages)
- The Liquor Boards product packaging standards
- The Liquor Boards laboratory guidelines for chemical analysis testing of wines
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Marketing your products and services
Market entry
The Liquor Boards require that wine exporters sell their products through registered Canadian agents. Any winery wishing to import wine or liquor into Canada must do so through a local liquor agency or representative, who must be registered with the respective provincial liquor authorities.
To achieve success with a new wine brand, potential Australian exporters need to establish the right combination of price, package and quality and then negotiate distribution.
Australian wine exporters should consider the following:
- The local liquor agency or representative must be registered with the respective provincial liquor authorities.
- It is highly recommended that you visit Canada to meet and interview prospective agents.
- Find a suitable agent with a good network of distribution. It is imperative that Australian wine exporters appoint a local agent to represent them in the respective provinces. The appointment of a good local agent to represent your wines is one of the most important decisions you are likely to make as it can determine the success or failure of your export strategy.
- A listing with the Liquor Boards should not be your only marketing tool, as product promotion and exposure play an important part in the wine industry and directly effects the volume of sales.
- Develop a long-term market strategy and don’t expect success overnight.
- Create an information pack with award records, wine critics’ reviews and a list of your major accounts (eg. a major hotel group or leading restaurant) that may be known to an international buyer or consumer.
Distribution channels
The Liquor Control Boards are the government agencies responsible for all importation and distribution of imported wines, spirits and beer in their province and set prices and quotas.
The Liquor Boards require that wine exporters sell their products through registered agents.
Most provincial Liquor Boards will deal only with agents directly appointed in writing by a manufacturer. Therefore, in order to conduct business with a Liquor Board, Australian wine exporters must appoint a local agent to represent them in the respective provinces.
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Contact details
The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.
Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.
Austrade:
- Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
- Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
- Administers the Export Market Development Grants scheme.
- Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
- Provides advice to the Australian Government on its trade and investment development activities.
- Delivers consular, passport and other government services in designated overseas locations.
A list of Austrade offices (in alphabetical order of country) is available.
More information
For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au |
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