Interprovincial trade barriers are making it tough for Ontario spirits producers to sell gin, whiskey and vodka beyond the province’s borders.
In fact, consumers can purchase gin imported from Britain but are restricted from buying equal products from British Columbia due to regulatory requirements in most provinces.
While trade within Canada is allowed from coast to coast to coast, those regulations also affects small Ontario businesses from entering other provincial markets.
Graham Reid, owner of Reid’s Distillery in Leslieville, says his products are available at the LCBO as well as local convenience and grocery stores.
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However, expanding the family-run distillery’s gin, vodka and premixed cocktail drinks outside the province is still a work in progress.
“We’ve looked to have our products available through the SAQ (Société des alcools du Québec) in Quebec and we have had preliminary conversations with B.C. through the B.C. liquor distribution board,” Reid said.
“But the reality being the SAQ has been a little bit of a challenge to get through there and B.C., we’re still early talks.”
Reid said his distillery, which opened in 2019, has been focusing specifically on the Ontario market but is exploring other provinces as well.
“Getting into Alberta is a lot quicker because you are not dealing with the same regulatory challenges,” he said.
“The reality is that often the competition is fairly strong with the large brands. Large, multinational brands have significant control of those areas and it makes it very challenging to … continue to have your product supported through that market.”
He added that Manitoba, which allows interprovincial shipments of all Canadian craft spirits, is not a top priority right now due to its smaller market size.
Facing the threat of devastating tariffs on Canadian goods entering the U.S. and reciprocal measures by the federal government, provincial and territorial leaders as well as politicians in Ottawa have vowed to eliminate trade barriers on many products.
Those barriers reduce competition and Canadians wind up missing out on alcoholic beverages from across the country, said SeoRhin Yoo, a senior policy analyst at the Canadian Federation of Independent Business.
“For the consumer, it becomes really difficult to obtain a spirit that they want to try out from a different province,” she said.
If craft spirit companies want to expand their business to other provinces or territories, Yoo said they would need to adhere to the different regulations of those jurisdictions. That includes requirements on packaging, labelling, lab testing, pricing and licensing.
“It’s a really wide range of things that business owners are having to deal with,” she said. “A lot of the time they just say, ‘You know what? It’s not worth it. It’s not worth my time and money because I’m a small business with not that many resources. So I’m not going to expand.’”
Despite the challenges, Reid is heartened to see greater interest in buying local to support Canadian products and small businesses in response to U.S. President Donald Trump’s threatened trade war.
“We’ve noticed a lot of bars and restaurants have gone out of their way to support us, and consumers as well,” he said.
Reid noted last September’s announcement by the provincial government that mandates at least 20% of all alcoholic beverages displayed on grocery and convenience store shelves be from craft producers hasn’t been fully implemented.
“We’re hopeful that is respected because currently we are not seeing that. We would love to see that the 20% local products on shelves is something that becomes not just a checkbox to check but rather something that consumers and retail partners are focused on.”