By Kim Craitor, MPP for Niagara Falls
I have received so many emails and phone calls about the efforts of Andrew Peller Limited and Vincor’s attempt to get the government to rescind the government’s recent initiative to ensure that 100 per cent of the Ontario grape crop gets put into bottles and not end up on the ground that I feel I should publish this response as an open letter to the industry so Niagara’s grape growers can decide from a position of knowing another point of view on this issue.
The so-called Winery and Growers Alliance is in fact a lobby group for the handful of giant wineries that enjoy a monopoly position in the trade of “Cellared in Canada” (CIC) wines.
Unfortunately, they own this monopoly at the expense of the grape growers and taxpayers of Ontario – and now they are using their privileged position to threaten the livelihood of Ontario grape growers.
Some background may be helpful in understanding why the government moved last fall to insure that Ontario grown grapes ended up in the bottles of Ontario vintners and not on the ground.
Two years ago the Ontario Government provided $4 million to Ontario grape growers for non-contracted grapes. At the same time, the CIC monopoly imported many more tons of off shore grapes from foreign countries. Last year 9,000 tons of great Ontario grapes were not purchased as these same companies imported more than 35,000 tons of imported juice.
Seventy percent of this offshore wine stock is blended with 30 percent Ontario wine stock. Some of it is sold through the LCBO at the same mark-up rate as all other wines. Most of it is sold through their offsite winery retail stores, where these so called “Ontario” wines enjoyed a hugely preferential mark-up or tax rate.
Four companies own 95% of these off-site winery retail stores.
These companies abuse their monopoly by giving preference to CIC wines and foreign grapes, at the expense of VQA wines and Ontario grapes.
The perverse result of this policy had been that the Government of Ontario was in effect subsidizing the grape growing industry of Chile, Australia and some other countries, while Ontario grapes were withering on the vine and Ontario growers were in danger of losing their farms.
Obviously this was unsustainable, especially if we want to grow the Ontario wine industry, not destroy it. That is why a year ago the government asked both the grape growers and the vintners to sit down and submit a strategy that would ensure the health of the Ontario wine industry. They failed to agree. As a result the Government signaled a change in its direction to assist this important Ontario industry.
The government’s position is that it no longer wishes to subsidize off-shore wine by preferential tax policies. It would also like to eliminate the confusion between Cellared in Canada and Ontario wines.
It wants especially to promote and support the VQA wine segment, and that is why it is continuing the important Market Enhancement Program for VQA wines sold in the LCBO.
The government has set a clear direction and provided for a transition period. By 2014, along with a continuing market for imported wines, we expect to see an increasingly thriving VQA industry, one in which all appropriate varietals grown in Ontario will be in bottles and not left to wither once again on the vine.
The Winery and Growers Alliance would do better to focus its efforts on working in partnership with Ontario grape growers to ensure a thriving industry, not threatening grape growers with punitive contract arrangements.
(Click on www.niagaraatlarge.com for Niagara At Large and others news and commentary of interest and concern to residents in our greater binational Niagara region.)