Buying wine in Ontario ‘a real chore’

By ERICA BAJER Standard Staff

It's a bitter irony for Ontario wine producer Norm Beal to swallow.

"We produce two-thirds of the country's wine and yet we have the most restrictive access to our own market," he said. "It doesn't make a lot of sense."

Beal, president of Peninsula Ridge Estates Winery in Beamsville, said Ontario wine producers are "grossly under-serviced" when it comes to access to the domestic market.

During a BMO panel discussion called Grape Expectations, Beal noted there are 1,253 retail outlets selling wine in Ontario compared to 1,380 in British Columbia, despite the fact Ontario has more than four times the population. That works out to approximately one outlet for every 10,000 Ontarians, he said.

"We make it a real chore for the Ontario consumer to go out and buy a bottle of Ontario wine," he said Monday during the discussion conducted via teleconference. "If the consumer can't get their hands on it, they're not going to drink it."

He said Ontario producers have the quality to compete in the world market, but first must make their mark at home.

"You need to own your own backyard before you can make significant headway in an export market," he said, pointing to the successes of Australia and Chile.

The Liquor Control Board of Ontario's efforts to promote Ontario wines and increase awareness on quality "has helped us grow sales within the LCBO system," Beal said.

However, he said, more locations are needed in order for the industry to continue to flourish.

Beal, who is a member and past chairman of the Wine Council of Ontario, said the organization is lobbying all three political parties to help increase the public's access to the province's wines.

He said issuing 500 to 1,000 more retail licences to sell Ontario wines would go a long way in opening up the domestic market.

If the market were bigger, producers would grow to meet the demand, he said.

In recent years, Beal said, Ontario has experienced tremendous growth in the industry.

When Peninsula Ridge Estates Winery opened in 2000, there were approximately 42 VQA wineries and now there are around 130, he said.

John Peller, president and CEO of Andrew Peller Ltd., said the wine industry in Canada is healthy, with consumption continuously increasing.

A BMO report on Canada's wine industry states that in 2010, sales rang in at nearly $900 million.

"Wine increasingly is viewed as the beverage alcohol of choice from a moderation, health and culture standpoint," Peller said. "The future for wine consumption looks very bright."

Peller said aging baby boomers are consuming more wine and there's been an upswing in the number of young people becoming interested in wine.

"The Canadian wine story has been a very, very positive one. The quality of wine produced in Canada continues to improve dramatically," he said.

Peller said the recession hit the wine industry, especially when it comes to its high-end products.

He said the wine business has smaller margins than others in the beverage sector due in large part to high capital costs and dependence on weather.

"It makes it a little tough in tough times for people to sometimes endure," he said. "This is not a game for the faint of heart."

David Rinneard, national manager of agriculture for BMO Bank of Montreal, said the bank's recent report on the Canadian wine industry revealed that it accounts for 9% of Canada's beverage sector.

He said wineries' output has grown at an average annual rate of 7.6% since 1998, which is much faster than the overall beverage sector at 1%.

Producers sell primarily to the domestic market, with the U.S. accounting for the largest consumer of exported wine, followed by China, Rinneard said.