(Wine-Searcher) - As Canada's wine market grows, Californian producers are trying to make sure they secure access.

Canada's love of imported wine could hold the key to a fermenting dispute over liquor regulation in British Columbia.

A new Vinexpo report into wine consumption showed that demand for wine in Canada far outstrips what the local industry can provide and consumption is growing at twice the rate of the rest of the world.

Canada is one of the world's top consumers of imported wine – drinking 32.7 million cases of foreign brands last year – and has catapulted to sixth place overall, said Xavier de Eizaguirre, Vinexpo chairman, after releasing the report this week in Toronto.

Canadian palates still lean toward traditional producers such as France and Italy – though "New World" wines from New Zealand, the U.S. and Chile will muscle into the market more over the next three years, predicts the study conducted by British agency International Wine and Spirit Research.

That's good news for California producers, who have cried foul over the British Columbia provincial government's plans to allow locally produced wines to be sold alongside food in grocery stores, while keeping imported wines separate.

California's Wine Institute wrote to the Canadian government last month, objecting to the plan and threatening a legal challenge.

"We believe that the proposal allowing only BC Vintners Quality Alliance (VQA) wines to be sold at BC grocery stores should be withdrawn or modified to allow for the sale of imported wines," Wine Institute vice president Tom LaFaille wrote. "Since these new opportunities are not extended to imported wines, they violate Canada's international trade obligations including NAFTA, GATT and the E.U.-Canada Agreement on wine sales."

The office of BC's Attorney-General Suzanne Anton acknowledged receipt of the letter, but didn't make any comment on whether the rule changes would be altered. The rules are due to come into effect on April 1.

Whether Canadians buy their wine from the grocery shelf or from a separate store-within-a-store, the country is projected to increase its overall wine consumption by 7.8 percent by 2018, the Vinexpo report notes. About three quarters of wine consumed in Canada is imported, with Italy the major source, followed by the U.S., France and Australia.

"The Canadian market is doing better than most. It's really a target for all major producers in the world," said de Eizaguirre.

Red wine is the biggest market driver in Canada, he said, making up 60 percent of consumption. Sales of B.C. wine topped $1 billion in 2014 for the first time, the report notes, and those sales will continue to climb over the next three years.

"Canadians produce a lot of very good wine but probably not enough for domestic consumption," said de Eizaguirre.

The U.S. became the top consumer of still wines last year, with a total consumption of 339.6 million cases (up 11.6 per cent from 2009). That country also ranks as the largest wine market, with business totaling $29.5 billion, the study shows.

By comparison, Canada's market is the seventh-largest in the world, with a value of $6.1 billion; that is projected to grow by 10.4 percent by 2018.

Per capita wine consumption in Canada has risen by 0.6 percent since 2013 and the outlook is strong, as consumption is expected to increase by 4.1 percent to reach 16.4 liters per adult in 2018, the report says.

"Over the next five years, Canada's wine consumption growth rate will be twice that of the rest of the world," said de Eizaguirre.