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Ont. plans boost for VQAs against blended wines

The Ontario government is drafting a plan to more clearly distinguish the province’s all-Canadian VQA wines from those made from blends of foreign and Ontario grapes.

The move comes in the wake of a controversy over the use of the term “Cellared in Canada” by major winemakers to describe such foreign/domestic blends.

And the province’s proposals, announced Tuesday by provincial Consumer Services Minister Ted McMeekin, feature a couple of direct hits on the “Cellared in Canada” claim, including a plan to increase the provincial levy on blended wines and a “short-term” increase in “Cellared” wines’ use of Ontario grapes.

The province’s proposals follow its request last fall for the Grape Growers of Ontario (GGO) and Wine Council of Ontario (WCO) to come up with a long-term plan for the grape and wine industry, along with ad hoc provincial funding of $4 million for producers’ uncontracted grapes.

According to the province, the GGO and WCO came back in agreement that “the government and LCBO could do more to support the grape and wine sector, but (the two groups) were unable to reach consensus on a long-term plan.”

In the long term, the province said Tuesday, “the success of Ontario’s wine industry depends on VQA wines.”

Currently, sales of VQA (Vintners’ Quality Alliance) wines at the province’s Crown-owned LCBO liquor stores “are rising much faster than sales of blended wines and imported wines.” About 108 Ontario wineries now make VQA products.

But in the short term, the province said, “grape growers need time to transition.” The province said its proposed plan addresses short- and long-term needs by:

  • raising the levy on blended wines sold in wine retail stores, to finance supports for the VQA sector;
  • requiring a short-term increase in wineries’ overall “Cellared in Canada” content to 40 per cent Ontario grapes, with a 25 per cent per bottle minimum;
  • providing support to grape farmers to encourage growth of VQA-quality grapes and support a “new grape varietal” plan between now and 2014;
  • introducing legislation to eliminate the domestic content requirement for blended wines in the Wine Content and Labelling Act  by 2014, which the province said will put even more emphasis on VQAs;
  • “ensuring clearer labelling and signage” for all Ontario wines;
  • renewing the VQA wine support program to promote sales of VQA wines through LCBO stores across the province;
  • increasing consumer access to VQA wines at the LCBO;
  • renewing the marketing program for Ontario VQA wines; and
  • asking the Ontario Farm Products Marketing Commission to examine how grape pricing and marketing can be improved.

“These measures will focus the entire industry on producing VQA wines, which both wineries and growers have agreed is the future of the industry,” the province said.

The province’s ministry of consumer services said it will discuss implementation of this plan with the GGO and WCO to come up with an “appropriate phase-in.”

The province stressed that it wants its plan to be revenue-neutral, and to shift focus and supports toward VQA wines. The province also noted it “is not considering the purchase of uncontracted grapes this fall.”

“Taxing Toyota”

The WCO, in a separate release Tuesday, expressed “cautious optimism” with the province’s proposals.

“We think the plan lays out the next steps in the evolution of Ontario’s wine industry,” WCO chairman Ed Madronich said. “We agree that VQA wines are the future of our industry, and we are encouraged that the government has adopted our recommendations with respect to a VQA support program and greater presence for VQA wines in LCBO stores.”

But Madronich said it was disappointing that the province wants to finance these improvements by raising levies on blended wines, which account for the majority of Ontario wine sales.

“While we welcome the investment in the VQA sector, we’re extremely disappointed that another key sector will be penalized at the same time,” he said. “When the Ontario government invested in General Motors, they didn’t do it by taxing Toyota.”

Madronich added that he empathizes with grape growers who are unable to find buyers for their crop, noting that the “vast majority” of this year’s grape production, about 50,000 tonnes, has been bought by Ontario winemakers.

With all winemakers also growing grapes themselves, “we’re never happy to see an unused surplus, but at the same time, I think we all have to recognize the importance of bringing supply in line with demand so that all partners can move forward toward a stronger, better, more sustainable Ontario wine industry,” he said.

“To that end, we’re supportive of the government’s move to ask the Farm Products Marketing Commission to look at the bigger issue of grape pricing and marketing. But that process must lead to real change if we’re going to achieve progress on the supply-demand situation.”

Canadian wineries and vendors have taken heat in the international press recently over the “Cellared in Canada” label claim and the placement of “Cellared” wines in or near the same retail section as VQAs.

Oxford Companion to Wine editor Jancis Robinson called it “the Canadian con,” while The Economist magazine criticized the province and LCBO last month for thinking “consumers should be hoodwinked in the cause of trying to compete with Chile and Australia in wine production.”

COPA Medallion COPA finalist in 2012, 2014 and 2015.
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