Frenchys At It Again

Europe's sour grapes
January 19, 2007

European wine producers have uncorked an unfair battle against Canadian wineries over a relatively minor item in the last federal budget.

Canada's best producers, those making Vintners Quality Alliance wines, were granted $10 million in tax relief in that budget. It amounts to between $20,000 and $25,000 per winery. While wineries welcome it, this money is hardly a windfall worthy of breaking out the champagne.

That has not stopped a French-led challenge from the European Union. It is working on a formal complaint before the World Trade Organization alleging the tax break is an unfair subsidy.

This is nonsense, given the $2.3 billion in subsidies flowing to European wineries each year. Canadian wine producers are murmuring about a boycott of European wine if the EU continues pressing local vintners. It may just come to that.

With European products already accounting for about half the wine sold in Canada, the EU's action seems churlish. Canadians may have to fight back with their corkscrews.