Barriers to sell wine in other provinces are still high
By Justin McNally, University of Guelph Agricultural Communications Student, for Farms.com
Many Canadians weren’t aware that it’s been illegal to purchase spirits and wine in one province and transfer it over provincial borders. Recently that all changed, with the amendment of the federal Importation of Intoxicating Liquors Act. This has now placed the ball in the hands of the provincial government.
Surprisingly just two provinces, Manitoba and British Columbia, have amended their liquor regulations. They allow for their citizens to purchase directly from the site of origin. But with the current state of balkanized provincial liquor boards, it isn’t easy to adopt this legislation.
“Our biggest opportunity as a winery is in our own country. But Canadian provinces are like their own countries because the barriers to entry are still high and it’s difficult to sell directly to citizens within other provinces,” says Len Pennachetti, Proprietor of Cave Spring Cellars in Jordan, Ontario.
Wineries and distillers must follow several steps to sell into another province. First, the wine or spirit must be sold to the province. Then once it is in the province’s liquor board, the province can disperse it to provincial stores, restaurants and or, in the case of Alberta, privately owned stores.
When a winery sells its wine to the province it is sold wholesale, and then the province is able to tax the product, increasing the margin of revenue for the province. With the new Act, wineries could circumvent the liquor board and sell directly to customers. This would allow for higher revenues for wineries.
With this change in legislation, wineries hope they will be able to open up the BC and Ontario wine industries to the rest of the provinces. Currently about 60 per cent of the Canadian wine market is made up of foreign imports, 30 per cent is international Canadian blends (wine that can be made with juice from other markets like Argentina and Chile) and just 10 per cent of actual sales are of products wholly grown and made in Canada.
It appears when consumers look to foreign markets like European Union and California, Canadian wine is always a second thought.
“In the EU winemakers produce 80 percent for export and 20 percent stays at home… when you’re in Canada you drink Italian and German and Californian, as well as Australian and think nothing of it. But you’re not going to go to France to drink Ontario wine,” says Norm Beal, past Ontario Wine Council President and Proprietor at Peninsula Ridge Estates Winery in Beamsville, Ontario.
Worse yet, due to the recent signing of the CETA trade agreement, there may be an even higher increase in foreign competition from the EU. Canada’s wine industry has become the world’s number one exporter of ice wine. This process has taken 20 years -- hopefully in the next 20 years we will be able to purchase Canadian product directly from the source and have it shipped inter-provincially, so that we can truly buy our product from “sea to sea”.
Justin McNally is from Beamsville Ontario, he is currently attending University of Guelph, enrolled in the Honours Agriculture Program. Justin’s family grows Vinifera grapes on the Beamsville Bench. He aspires to work in marketing or sales in agriculture. Justin also has a passion for wine and hopes one day to earn his Sommelier accreditation. This article is part of Kyra's course work for the University of Guelph agricultural communications course, instructed by Prof. Owen Roberts.