In Vino Veritas: Getting Provincial (Bill C-311)

This week Bill C-311 passed through the house of commons with uncommon zeal.  The bill which lifts the ban on interprovincial importation of wine became more of a house of commons circle jerk of smoke blowing and back patting. I warn your right now, this may not be super entertaining and I will not be offended if you wait till my next article. But if you like semi dry business based wine writing and half baked conspiracy theories you are going to be excited.

The Bill

The gist of the bill allows a 1929 anti rum running law to be lifted so that people can bring wine across provincial lines. Well that’s if your provincial law doesn’t supersede this law. In Nova Scotia for example all liquor brought into the province(excluding duty free) must be imported by the province’s liquor board. The LCBO in Ontario and the SAQ in Quebec could also have a case for disallowing the importation across provincial lines as well. So for all this political posturing, two of the three biggest liquor markets in Canada could possible stay closed to cross province importation.

On the surface, I have no real problem with the bill, it makes sense.  But I think that the way the bill was presented to the public was grossly dishonest and I fear for some of what could come out of this bill. For full disclosure I do not buy canadian wine, and I will never buy a BC wine and have it sent to Ontario legal or not.** If somebody poured me a $50 bottle of wine from the Okanogan Bench I would probably enjoy it. But I also would never in a million years pay a penny more than $25 dollars for it.

First, the way the bill was presented a few months ago was that wine makers and grape growers in British Columbia are starving to expand their market. This I know to be false.**Most wineries in BC cannot keep up with the demand from BC and Alberta.

The reading of this bill was a chance for our politicians to talk in platitudes about the canadian wine industry.  And how great a product we have, and blah blah blah blah…

The Business

My fear is that this new bill will bring about a tenuous proposition for a winery, which could wear the already thin trust of the market thinner. And the chances that Canadian grown grapes become devalued.  Canada still has a relatively young wine industry, and many regions have yet to figure out what they do well. To pay top dollar for these wines is like paying top dollar for software that had no beta testing.(Ahem Microsoft)

Here is an example: Mission Hill Occulus is a super premium wine from the Okanogan. Mission Hill has a new problem.  The problem is that the grapes which go into a super premium wine, are maybe 2-3% of the entire yield for the season. Unless you acquire more land and put more money into sorting to find those super premium grapes you cannot make enough Mission Hill Occulus to quench the demand this law is creating. Occulus is about $70 a bottle in Alberta liquor stores. The people at Mission Hill have some choices to make.

Do they gut the consumer and increase just the price? Which may cause the consumer to abandon a brand that is already competing with more esteemed(And better quality) super premiums from the rest of the world.

Do they go to local estate growers and buy super premium grapes on the open B.C Market at a inflated mark-up because the estate growers know that they have you over a barrel? Sure that is an option, but you run into the same issue as the above problem and you make less profit per bottle.

Do reduce the quality of Occulus by allowing lesser grapes in? Maybe, maybe nobody notices that the quality has gone down during a good year, but in a bad year you have people expecting a certain quality and they get crap. $70 a bottle crap, your brand again is harmed. But most likely you make enough money in the good years to get by in the lean years in the short term.

Do you scrap the VQA tag, since it’s meaningless anyway, and buy cheap super premium grapes from Chile. Now you can increase your production and increase the price because you know you have a more consistent and higher quality product than with just Canadian grapes alone? This option actually has the least downside for Mission Hill. Sure you have to disclose what you are doing, but the chances are that the majority of your customers will never think to look or care are low. There may be blow back, but if Mission Hill thought of this, than there is a good chance their competition has thought of this and may also be doing it.

So if this practice becomes popular, now you have a movement. Canadian winemakers becoming grape importers and speculators. Canadian grape growers(farmers) will not be able to compete with the world market and they will make less. It is actually a pretty good microcosm of our current economic failings in manufacturing. Weird how I got there eh?

The Brass Tacks

I want Canadian wine to be great. There are some fantastic wines that this country produces, be it in Ontario, Nova Scotia or British Columbia. The problem is that Canadian wine isn’t a trustworthy product. Cheap canadian wine is atrocious, expensive Canadian wine is not worth the cost.

People choose to drink Canadian wine for a few reasons. They have been to the vineyard and feel an emotional connection to the wine, they feel as though they should buy Canadian wine out of a sense of loyalty, they have enough money that spending the huge price tag on those wines that are of a high quality doesn’t matter, or they don’t actually like wine.****

Whatever the reasons why we choose to support canadian wine this bill does not cater to 98% of the wine drinkers in this country. It is a strategic bill, that was pushed forth by corporations who own canadian wineries who have figured out that their investments in Canada are not as profitable as the rest of the world. This new law will be an excuse for the larger companies to increase prices, decrease quality and use Canada’s non existent regulations on the use of foreign grapes to run smaller wineries out of business. These wineries prey upon our sense of nationalism and loyalty to make their profits rise. Does this sound familiar? Does this fit into the Conservative agenda that we have seen in other sectors?

My advice to you if you want to support Canadian wine, is to drink local, and drink family owned. Do your research, and protect those canadian winemakers who want to do things the right way.

*To Clarify: Without hyperbole, Wine from Canada is, in my professional opinion, the worst value in the world. It is inconsistent, and unless it is very expensive, it’s quality is medium to low. My palette is too good and my wallet it too empty to ever take Canadian wine seriously. I could get a $15 Italian wine that would knock out a $30 Canadian wine in the first round. It’s not even a competition. Unless BC somehow annexes Washington State and Oregon, and keeps the prices at current levels, post annexation, I will never import a wine from BC.

**Wine makers are not starving in a number of ways. Wine growing land in the Okanogan Valley costs more than wine growing land in Napa Valley. There have been Okanogan wine makers who have left the Okanogan because it’s cheaper to start a winery in Napa or Sonoma. These poor multi millionaires are not starving. As well, there isn’t really any more quality wine growing land to expand production to in the current wine growing regions.

***Yup I am going to bash something that most of my readers don’t know exists. And I am not going to explain it beyond saying the VQA is as useless as tits on a bull. It does nothing. It has no power and so few people care about the VQA stamp that it’s laughable. Everyone in the wine industry knows this, but if your winery can operate with no regulation why should the VQA system ever be changed?

****Here is my caveat, Canada makes some wonderful white wines. The problem is that there is a line where people will no longer buy white wine. There are only a few wines in the world that people will gladly pay more than 50 dollars for. Canadian wines are not those wines. This caveat excludes Ice Wine who’s price is artificially inflated by the Asian market. If Asian tastes begin to change you will see the price of Ice Wine take a dive.