Canada retracts decision to avoid labelling West Bank wine as Israeli

The decision drew considerable criticism from the Israeli embassy in Ottawa and several Canadian Jewish advocacy groups

Shiloh winery was highlighted in Canada's initial decision on Thursday (Getty)

The decision to avoid labelling wines as products of Israel if they are produced in the West Bank or in other areas controlled by Israeli forces has been reversed by Canada’s federal food inspection agency.

The U-turn comes after the agency said that they had not “fully considered” the Canada-Israel Free Trade Agreement when it made its initial decision earlier this week.

The wines did in fact adhere to current policy, it said. .

According to the agreement, Israel refers to any territory in which its custom laws apply.

Wine sellers had originally been told to avoid declaring Israel as a country of origin for wine produced outside of its official borders as it would be "misleading" and contravene Ottawa’s policy on the territory.

The Liquor Control Board of Ontario sent a letter to the vendors informing them of the decision, specifying not to import or sell wines labelled “Product of Israel” from the West Bank wineries Psagot and Shiloh.

“I request that all vendors discontinue any importation or sales of products labelled as ‘Products of Israel’ from the wineries named above (or others located in the same regions) until further notice,” the letter stated, according to The Times of Israel.

It drew considerable criticism from the Israeli embassy in Ottawa and several Canadian Jewish advocacy groups.

Yaakov Berg, the chief executive of the Psagot Winery, was among those angered by the move.

"We have returned home to our homeland, the place where our ancestors made wine continuing in the same place for this ancient tradition," he said.

"We live here in Judea and Samaria under historical rights. Specifically Canada, a country founded and expanded as it conquered and destroyed the homeland of another people, a country with no roots or historical validity of its existence there, questions the right of Jews to live and grow vineyards in the land of our forefathers."

The Food Inspection Agency expressed regret for its decision and said it was taking steps to correct the situation with the liquor board in the province of Ontario.

The EU maintains that the territories do not fall within Israel's borders under international law.