Canadians passing on 'trophy wines'

The market for premium Canadian wines has hit a wall of consumer resistance, a panel of Canadian vintners said Monday, prompting wineries to shift their focus to lowerpriced offerings.

The 2008-09 recession changed drinking habits, the presidents of three prominent Canadian wineries - Andrew Peller Ltd., CedarCreek Estate Winery and Peninsula Ridge Estates - said in a media tele-conference.

"In tough times, people still drink; they just drink a little bit differently. Our industry has had to make some adjustments, and I think the end result is that it is benefiting the consumer," said CedarCreek president Gordon Fitzpatrick.

"We had about 15 years of double-digit growth in our industry. That has flattened out and it has become more noticeable since the recession of 2008," said Fitzpatrick, speaking specifically of Okanagan VQA wines.

Growth is now at only two per cent in the Okanagan, he said. "It used to be in the heady days of 200506-07, that consumers were bragging about trophy wines and what they were paying for certain wines.

That is no longer the case. Now people are bragging about that great $20 bottle of wine they have found."

The change in drinking habits has put pressure on winery margins, the winery owners said.

To adapt to the change, Fitzpatrick said CedarCreek has gone from offering three levels of quality to two. He cited as an example the winery's Merlot bottlings - a Platinum Reserve wine selling at the $40 level, an Estate wine at $30 and entry level wine at $20. The Platinum Reserve remains but the Estate and entry level bottlings have been combined into one.

The price remains at $20.

Norm Peal, president of Peninsula Ridge, a Niagara region winery, said his winery is also struggling to adjust to the recession.

To compete, vintners are having to lower their own costs. One bright spot is exports, particularly China for ice wines and red Bordeaux style wines, he said.