Canada: Ontario Wine Causing Headaches: Vintners Struggle To Comply With Labelling Laws

Regulated by the federal and provincial governments and the Vintners Quality Alliance (VQA), wine labelling requirements in Ontario can be complicated. This can make it difficult to comply. Despite this, it's important to adhere to the various requirements as the repercussions for non-compliance can be hard on both the pocket book and the day-to-day business of a winery, particularly if a member's Vintners Quality Alliance status is revoked. Although prosecutions and litigation in Ontario regarding wine labelling have been rare in the past, this will likely change as Ontario increases wine production and its profile on the international stage.

General labelling requirements are imposed by the federal government and are set out in the Consumer Packaging and Labelling Act. The Consumer Packaging and Labelling Act prohibits, for example, the application of a label on a product that contains false or misleading representations that relate to that product. It also requires labels to adhere to the Food and Drug Regulations, CRC, c. 870. Division 2 of the Food and Drug Regulations outlines the labelling requirements for alcoholic beverages, and section B.02.100 specifically deals with wine labelling.

To label a product "wine," it must be "an alcoholic beverage that is produced by the complete or partial alcoholic fermentation of fresh grapes, grape must, products derived solely from fresh grapes, or any combination of them." It may then have specific other elements added to it during the course of manufacture. If the product is derived from a fruit other than grapes, it must be labelled "fruit wine" or specify the type of fruit before the word "wine" on the label.

Provincially, wine labelling is governed by the Wine Content and Labelling Act, 2000. Under Ontario Regulation 659/00, the province regulates the minimum content and labelling standards for the manufacture of wine in Ontario. In particular, the Wine Content and Labelling Act, 2000 focuses on the amount of Ontario-grown grapes or product produced from such grapes that must be included in a wine.   

The VQA was designated as Ontario's wine authority in 1999 pursuant to the Vintners Quality Alliance Act, 1999 and its regulations. The Vintners Quality Alliance Act, 1999 created an appellation system to assist consumers in identifying wines based on region and wine-making methods. Although membership in the VQA is voluntary, it is an important quality indicator for consumers.

VQA wine must be produced in Ontario from grapes that have been grown in Ontario or from grape juice/must produced from grapes grown in Ontario. It must also meet the standards of the VQA. The VQA has the power under the Vintners Quality Alliance Act, 1999 to make rules "establishing and defining terms, descriptions and designations to appear on labels of Vintners Quality Alliance wines, including varietal labelling, vintage dating, viticulture areas, geographic indications and vineyard and estate-bottled declarations."

In order to use the terms established by the VQA, a manufacturer must be a member of the VQA and must apply for approval to use relevant terms on each wine produced. The sale of wine labelled with a VQA term that has not received approval is prohibited. Violations of the Vintners Quality Alliance Act, 1999 can result in hefty fines and the loss of VQA membership.

In one case, three charges were laid in relation to a winery's use of terms regulated by the Vintners Quality Alliance Act, 1999 contrary to subsection 6(1). In October 2011, the winery's membership in the VQA lapsed, and the VQA sent the winery a notice advising that it could only use VQA-regulated terms and descriptions on previously approved wines for up to one year from the date of the lapse, after which the winery was to discontinue use of the terms. The winery continued to advertise certain of its previously approved wines using the terms "VQA," "Niagara Peninsula" and "ice wine."

Pursuant to the VQA's bylaws, if a membership is revoked, the winery is only permitted to continue to sell a product for up to one year after revocation. The winery argued that its membership had not been revoked but rather lapsed, and therefore, the consequences of having a revoked membership were irrelevant. The bylaws were silent on the consequences of a lapsed membership. The court gave the bylaws a strict reading and refused to apply the consequences of a revoked membership to a lapsed membership. It concluded that as the wines' approval had never been revoked, they were still VQA wines, so the winery was allowed to continue using the approved terms.

As wine production in Ontario increases, the amount of prosecutions and litigation relating to the wine industry is likely to increase as well. Therefore, wineries must ensure that they understand the intricacies of the various relevant acts and regulations prior to advertising or selling their wines.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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