The Canadian Wine Market:
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1 The Canadian Wine Market: From State Monopoly and Trade Barriers to IP Regimes September 16, 2016 Ekaterina Tsimberis Partner Barrister and Solicitor / Trademark Agent
2 Canadian Market in a Glimpse Canada is a net importer of wine In 2012, approximately 2/3 of wine consumed, in value, was imported. Imports value of $2.3 billion Ontario s LCBO: One of world s single largest purchasers and retailers of alcoholic beverages 2
3 A Fragmented Market Federal Legislations - Food standards, Chemical Content Requirements - Consumer Packaging and Labelling Provincial Legislations - Distribution & Retailing - Production - Applicable Permits - Excise and Customs Tariffs - Intellectual Property 3
4 Wine Monopoly in Canada Governmental Agency (eg: Régie des Alcools, des courses et des jeux; Alcohol and Gaming Commission of Ontario) Wine Producer Government Owned Retailers (e.g.: SAQ; LCBO) Bar Consumer Restaurant Wine Producer Agent 4
5 Alberta the exception Alberta Gaming and Liquor Board Independent Retailer Independent Retailer Restaurant Bar Wine Producer Warehouse (Connect Logistic) Independent Retailer Independent Retailer Independent Retailer Restaurant Bar Consumer Independent Retailer Independent Retailer Agent 5
6 Impact of the Monopoly Cost Is Generally Higher in Canada Marqués de Cáceres, Gran Reserva 2008 (Rioja) France (Vinissimus): $31.12 Ontario (LCBO): $37.22 Quebec (SAQ): $ ,5% Veuve Cliquot Ponsardin France (Nicolas): 66.48$ Ontario (LCBO): 79.78$ Quebec (SAQ): 79.62$ 6
7 Impact of the Monopoly Product Diversity is Diminished Exception: In Alberta where product offering is more diverse and where smaller quantities of a product sold/tolerated Product Availability Differs between each province Selection of products depend on the provincial retailers standards and choices. Private Import is still marginal and more expensive 7
8 Trade Barriers Non IP related IP related Content: Chemicals, % of Alcohol, Sulfites Trademarks : name, logos Bottle: Volume; Bottling; in Bulk Certification Marks: eg: Organic; VQA, Marque Quebec Geographical Indications Labelling: Grape Varietals, Name, Year Shape of the Bottle 8
9 Shape Of The Bottle Trademarks Industrial Designs Choya plum wine Cognac Louis XIII 9
10 Alcohol marketing and Advertising Overview Regulated at the provincial level. Provincial agencies (e.g. Ontario s Alcohol and Gaming Commission) are invested with regulatory powers. Advertising intended for broadcast must also meet federal broadcast regulations (CRTC). Advertising Standards Canada (ASC) will review ads for compliance with CRTC, Ontario and BC requirements. Not a legal requirement, but often practical to do so. 10
11 Provincial Regulation Advertising Most jurisdictions: ads may not imply that alcohol consumption results in certain consequences, such as social success, athletic skill or enjoyment of an activity. 11
12 Provincial Regulation Advertising Most jurisdictions: prohibit ads from depicting situations involving alcohol and Minors Vehicles, or Illegal activity. 12
13 Provincial Regulation Marketing All Provinces: minimum pricing requirements. restrictions around distributing alcohol samples and conducting tastings. Most provinces: discounts or distribution of free liquor are restricted promotion and event sponsorship involving of a particular brand of alcohol is allowed, with restrictions 13
14 Federal Regulations Broadcasting Code for broadcast advertising of alcoholic beverages (1996) Objective: ensure that alcoholic beverage advertising does not contribute to the negative health and societal effects relating to excessive or inappropriate alcohol consumption. 14
15 Federal Regulations Broadcasting Forbidden types of content in commercial alcohol advertisements for broadcast in Canada. Endorsement by role model for minors Influence non-drinkers to purchase alcohol Product as a status symbol Showing alcohol consumption 15
16 General legislation Advertising/competition Cornerstone of Canadian advertising law Competition Act Targets false and misleading representations and deceptive marketing practices Criminal and civil recourses Provincial: Consumer protection legislation Advertising Standards Canada: Non-profit national industry association Canadian Code of Advertising Standards 16
17 Canadian Intellectual Property Regime Protection Regimes under the Canadian Trade-marks Act Trade-marks Unfair competition Geographical Indications Certification marks 17
18 Trademarks Clearance scenario 1 Words/Designs: registered vs. unregistered Goodwill in Get-up Casella Wines PTY Limited v. Constellation Brands Canada (T ) 18
19 Trademarks Clearance scenario 2 A distinguishing guise may also be protected: e.g.: shape of goods or their containers, color, way of wrapping or packaging goods that shows they have been made by a specific individual or firm TMA449,975 The distinguishing guise comprises the combination of the mode of packaging the ware in a container having a shape substantially as shown and having a black matte colour applied to substantially the whole of the visible exterior surface of the container. The colour black matte is claimed as a feature of the distinguishing guise. 19
20 Certification Marks A mark that is used for the purpose of distinguishing goods or services that are of a defined standard: character or quality, working conditions, area within which the goods have been produced 23(3) The owner of a registered certification mark may prevent its use by unlicensed persons or in association with any goods or services in respect of which the mark is registered but to which the licence does not extend. 20
21 Geographical Indications CANADIAN CHAMPAGNE 1994: Implementation of the GI protection regime in TMA. Exceptions made for certain generic terms (e.g.: Champagne, Bourgogne) and for when GI was used in good faith since before : Signature of the Agreement between Canada and the European Community on trade in wine and spirit drinks, which provides a phasing out of some generic terms 2004: Bordeaux, Medoc, Chianti, Malaga ( ) 2009: Bourgogne, Burgundy, Sauterne ( ) 2014: Champagne, Chablis, Porto ( ) Dec. 2015: Champagne becomes a registered GI 21
22 Geographical Indications Scope of protection Prohibition to use/adopt protected GIs (or their translation): in association with wine that is not originating in the designated territory. Prohibition to register a trademark consisting of a protected GI if the registration is directed at wine not originating in the designated territory. 22
23 Geographical Indications Example of Canadian protected GI Example: Bordeaux Registered September 11, 2009 (no. 1,431,142) Products: Wine Protection: Wine originating from specified communes of France 23
24 24 Geographical Indications Example of French Cahier des charges: Bordeaux
25 Unfair Competition 7. No person shall (c) pass off other goods or services as and for those ordered or requested; or (d) make use, in association with goods or services, of any description that is false in a material respect and likely to mislead the public as to (i) the character, quality, quantity or composition, (ii) the geographical origin, or (iii) the mode of the manufacture, production or performance of the goods or services. The test for passing off: Goodwill Misrepresentation Damages 25
26 Unfair Competition INAO v Mosti Mondiale (2001) Mosti Mondiale: Supplier of grape juice and winemaking kits referring to various protected GI (e.g.: Saint-Emilion, Bourgogne, etc.) Superior Court of Quebec issued an order prohibiting Mosti from using these GIs 26
27 ON AN INTERNATIONAL LEVEL: Comprehensive Economic and Trade Agreement Trade Agreement between Canada and EU Objective to progressively eliminate tariffs on wine and spirits Agreement provides a review mechanism 5 years following entry into force (Annex 30-C). 27
28 Thank You Ekaterina Tsimberis 28
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