Alan McGinty

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Cellared in Canada - Essential Service?

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By Alan McGinty

Pity This Country
A member of the G7, this country’s wine buyers are welcome guests in the big regions. It spends big bucks on fine wines and its citizens guzzle millions of litres from Europe, America and Australia. The local industry has been growing even though a British writer suggests it “is generally not considered to have a suitable climate for growing grapes.” A few big companies bring in lots of grapes, grape must and bulk wine, finish it and call it “domestic”. There are squabbles over labelling. While local producers now tout wines made from 100% local grapes, hold competitions to choose the best and true local wine commands a premium, it’s still tough to be a winemaker in Japan.


Vines reach for the sunshine in Ontario's Prince Edward County.

Meanwhile, Back Here
The Canadian industry may get more support, but the same forces are at work here in privileging imports: high local labour, tax, land and grape costs, small production numbers and a not ideal climate.

Ontario has around 15,000 acres under vine and BC about half that. Chianti Classico, one of eight sub-regions within Chianti, has 17,640 acres of vineyards.

Ontario and BC produced just over 15 million litres of VQA wine in 2004. In 2006, Canadians consumed 405 million litres of wine. Ignoring the other nine provinces that account for over 70% of the wine sold in Canada, the 23 million litres of Cellared in Canada (CIC) sold in Ontario last year is about the same as the increase in overall wine consumption in Ontario between 2004 and 2008 (up 21.3m L).

In Canada, CIC uses local grapes and then sells wine more cheaply than VQA: half of all wine grapes in Ontario end up in a CIC blend according to the Wine Council of Ontario. If CIC were banned, Hilary Dawson suggests the minimum profitable price for all-Ontario wines would be “12-13 dollars. We cannot make wine under $10. If prices came down for input costs, it might be viable for some producers, but you can’t mess with the consumer – you still need to meet their expectations.” More than half the wine sold in Ontario last year cost less than the current record-high average of $9.32 per 750ml.

Undercutting Hilary’s “$12” by five cents, Vincor has just launched a new line of all-VQA wines called “Open”. They look like stylish vodka coolers and retail for $11.95. No tasters have reported on it yet and there are no sales figures, but it’s still wine that will be considered “expensive” by over half the wine-buying public in Canada.


Canadian Connoisseurs' Heaven: Frank at the AGO.

Connoisseurs
When it comes to local wines, you can’t get more boosterish than the highest profile restaurant in the city to go all-Canadian. Courtney Henderson is the sommelier at swank Frank at the Art Gallery of Ontario. Her customers are sufficiently well off that they’ll pay $18 for a glass of Tawse Meritage, so the link to CIC buyers who won’t go above $10 for a bottle is perhaps tenuous.

“Boutique wineries are trendy,” says Henderson. “If you say something’s organic or a new boutique that only makes 200 cases, it doesn’t matter if the price is higher, people lap it up.” She says there’s less interest in big wineries like Jackson-Triggs and Inniskillin “even though those wineries make some high quality wines – the Delaine Vineyards 2007 Sauvignon Blanc [VQA] is fantastic.”  

Henderson hits one issue that is if anything more pronounced at the entry level in Ontario: “You can’t just grab any bottle and expect it to be good, even from a winery you know. Consistency of product is one of our weaknesses.” When asked if better vineyard management or better winemaking would help, she said “how about a better climate?” and pointed out that vintage variation is a fact of life here. In a nod to the thinking behind CIC wine, Henderson conceded that “bigger producers are perhaps better able to produce a more consistent product.”

So How is CIC Wine Made?
“Finished wine” is imported then blended with Canadian product. You may have visions of a hose spraying Chilean cab until it fills a tank that’s 30% full of Ontario cab, but that’s not how it works.

Heidi Montgomery is a winemaker at Peller Estates in Niagara and has been with the company over ten years. She’s businesslike, confident and knowledgeable. She juggles big numbers in a balancing act across continents and manages a complex production cycle.

“We deal with 8-10 wineries each year, in different parts of the world. Once a wine is approved for purchase, we will say ‘save us 100,000 litres of this’. We will then receive the wine the next 6-8 months. This is the best part: we get  to choose the best wines available in bulk. We get shiraz from Australia, sauvignon blanc from Chile, pinot grigio from Italy... we then follow certain formulations in order to keep our taste profile the same – fruity, soft tannins, no vegetal notes. We also ensure that no one wine is dominant – each wine has a set percentage, usually between 20 and 30 percent.”

Montgomery says pinot grigio is a big seller and while “we tend to grow pretty good pinot gris, we just cannot do 1.5 million litres of it in Ontario. The problem is winter kill – if we get one bad winter we can be wiped out, which doesn’t happen elsewhere. Also, we keep the best grapes for our VQA. There are times we cannot make a VQA because we need to keep enough Ontario product back to put into our blends. This year, we are pleased we have enough pinot gris for both programs. So as growers are producing more of varieties we can use, we’ll definitely use them.” But… “Will Ontario ever produce enough grapes to make 50 million litres of wine? I’m going to say probably not.”

With the LCBO offering a range of imported wines at $7, even CIC can’t compete: “There’s no way we can make a profit at that level. Even as we are getting the benefit of less expensive foreign wine, we are still more expensive than the cheapest import wines.”

Sommelier Courtney Henderson says “there’s a place for CIC in the market I suppose. Do I like it? No. But a lot of people are still in the dark about Ontario wines in general. The government really needs to get behind the wine industry as they do in Italy or Australia. We’re not marketing wine the way we could be, with TV ads, magazine and other campaigns. You need to get people on board.”

Bad Wine Happens to Good Places


Care for some California wine?

In California, the Napa Valley accounts for just 4% of the state’s wine production – a rounding error on the millions of gallons of nasty “jug wine” Cali churns out. In Spain, supermarkets offer boxes and bottles of plonk that is cheaper than brand-name water, irrelevant to the fine wines of Rioja and Ribero del Duero. In France, vin de pays producers will sell you lousy wine for a couple of euros or less.

In Ontario, some of the same companies that produce our best wines also churn out generic “cheap” product to capture market share, which muddies the waters. But that perhaps underlines the importance of the revenue generated – CIC producers also have VQA programs and invest in the staff training, equipment and marketing needed to take the industry to the next level.

Debbie Zimmerman of the Grape Growers of Ontario suggests that “we’re in our adolescent phase and we need to start maturing. It’s got to be a partnership between the winemaker and the grower. We want to fix the structural issues that prevent us from selling more grapes and wine. We need to focus on collective efforts to move our industry forward.”

Let’s Pull Up Our Socks
Ontario ranks 5th in per capita consumption of wine in Canada. If it were to match Quebec (2nd place, after the thirsty Yukon), there would be a 46% increase in wine sales in Ontario. Without changing any of the percentages of VQA vs. CIC vs. imports, producers of both CIC and VQA could work flat out and still be unable to supply enough product. Quebec’s per capita wine consumption, incidentally, is below that of every single country in Western Europe, including Ireland and Denmark, which have scarcely a vineyard between them.

Perhaps there should be more focus on wine across the board rather than on who makes it or how. The Ontario market alone is more than big enough.

Alan McGinty
www.alanmcginty.com

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Sources:

Canadian wine production and consumption: WSSJV Database, Statistics Canada, LCBO Annual Report, SAQ Annual Report.

Japanese wine: “World Wine Markets” edited by Kym Anderson, Edward Elgar Publishing, Inc., Cheltenham, England. 2004.
Oxford Companion to Wine, Jancis Robinson, Oxford University Press, England. 2006


 


Comments


Alan, another great article...I still think some followups are needed. For instance, SOPEXA's 2008 study of wine consumption showed that a lot of people drink "Canadian" wine and most of these like the product. What about labelling issues and store placements? These are sore points among writers and some consumers, and even Ontario wineries.

How can we ensure that the bulk wines are not loaded with additives meant to enhance, such as Tanin Plus, AR2000, etc. Is there testing on these -- and other bulk wines -- by the LCBO lab?

Why is the imported part of CIC wines taxed at domestic rates?
What about WATER that is allowed under the Wine Content Act. amd why is it taxed?

What about campaigns designed to ensure at least 51% Canadian content in CIC wines?

Maybe a part three is coming up next week????
Post Reply By Dean in TORONTO on 7/10/2009 3:43:13 PM

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