Court rules that the case of Israeli wine labels be returned to government agency

Psagot wine
Wines from Psagot winery (CJN File Photo)

The Federal Court of Appeal has sent the case of the “misleading” labels on wines made in Israeli settlements back to the agency where it all began.

The court returned the matter to the government body which had supported “Made in Israel” labels, saying the agency is not bound by a lower court’s finding against the labels.

In a ruling on May 5, the court dismissed an appeal of a ruling from 2019 which found that “Product of Israel” labels on wines made in settlements in the West Bank or Golan Heights were “false, misleading and deceptive.”

Justice Anne Mactavish of the Federal Court arrived at that conclusion two years ago because she found that labels on settlement wines violated Canadian consumer protection laws which prohibit labels on food and drugs that are false, misleading or deceptive, based on the view that territories conquered by Israel in 1967 are not recognized in international law, including by Canada, as part of Israel proper.

While she employed strident language in her ruling, ultimately, she sent the matter back to the Complaints and Appeals Office of the Canadian Food Inspection Agency (CFIA), where the controversy began, with instructions that it determine how the wines should be labeled.

The appeals court said Mactavish “should not have embarked on the (CFIA’s) task.” It said the “appropriate remedy” is to return the case to the CFIA “so that it can determine the matter for itself.”

Reading his judgment read from the bench after four hours of oral arguments, Justice Marc Noel, Chief Justice of the Federal Court of Appeal, added that the CFIA is not bound by the lower court’s decision and may arrive at any outcome it deems appropriate – provided it is based on facts and interpretations which “can be seen to be reasonable.”

Noel said the agency this time will be able to hear from all affected parties, and may weigh whether the Charter of Rights and Freedoms should be considered.

The case goes back to 2017, when Winnipeg resident David Kattenburg complained to Ontario’s Liquor Control Board (LCBO) that products from two wineries, Psagot and Shiloh, originated from Jewish settlements in the West Bank, not from Israel proper, and were falsely labeled as “Product of Israel.”

Hearing nothing from the LCBO, he took the case to the CFIA, which sided with him and ordered the liquor board to remove the wines from shelves.

But after Jewish advocacy groups erupted in protest and a member of Parliament got involved, the agency reversed course within 24 hours, and said the wines could be sold under the Canada-Israel Free Trade Agreement, which it had not considered (the appeals court said while the agreement can be “informative,” it did not know why the CFIA considered it “determinative.”)

Kattenburg appealed to the agency’s Complaints and Appeals Office (CAO), which upheld the reversal. He then sought a judicial review at the Federal Court, which sided with him, and went further, saying the CAO’s decision was unreasonable because it had not considered the Charter of Rights and Freedoms.

Consumers need accurate information, Mactavish had found, and identifying settlement wines “incorrectly” as Products of Israel “inhibits the ability of such individuals to express their political views through their purchasing choices, thereby limiting their Charter-protected right to freedom of expression.”

Jewish groups urged an appeal based on what they said were errors in the decision.

In a separate ruling last October, a judge of the Federal Court dismissed all interveners in the case, including the Centre for Israel and Jewish Affairs and B’nai Brith Canada, and added the Psagot winery as a respondent.

David Elmaleh, lawyer for Psagot, told the appeals court that Mactavish’s ruling should be dismissed because his client was not aware of legal proceedings “until it was too late.” He said the winery would have submitted evidence that “Made in Israel” labels are “reasonable.”

Psagot’s written arguments submitted to the appeals court leave little doubt about how the winery regards the legal status of its products: “Psagot Winery’s business license was issued by the State of Israel and its wines are produced by Israeli nationals. The winery is subject to Israeli domestic law, Israeli taxation laws and Israeli customs laws (when exporting). Psagot wines are produced by Israelis under the auspices of an Israeli company in an Israeli community subject to Israeli law in Israeli territory.”

In a statement to The CJN, Elmaleh said the winery is pleased that the court sent the case back to the CFIA’s appeal body, “with an express direction that the lower court’s decision is not binding,” and that his client may make submissions as an affected party.

B’nai Brith Canada called the appeals court’s decision “a major setback for the anti-Israel movement in Canada.”

It puts the matter “back on track to being resolved fairly and correctly,” said Michael Mostyn, the organization’s CEO. Jews making wine “in their indigenous homeland is something to be celebrated, not stigmatized.”

CIJA said the case “is part of a broader campaign to boycott Israel and Israeli goods.” Until there is a final agreement between Israel and the Palestinians, “wines produced under the authority and regulatory framework of Israel should be labelled accordingly.”

The LCBO told The CJN that it no longer carries wines from the Shiloh and Psagot producers. Both were part of the LCBO’s Vintages collection, purchased in limited quantities and not replenished once sold out. The last Vintages release date for Shiloh wines was October 2016 and February 2017 for wines from Psagot.

The board provided a list of 56 wines and liqueurs it sells that it said are “sourced from Israel.”

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