Bob’s Blog

There has been interesting news from the wine world in recent days.

Recently, Xavier de Eizaguirre, the Chairman of VinExpo (the world’s largest global wine and spirits exhibition) highlighted key results from a recent study on world wine production/consumption patterns. For Canada, the study predicts a 17 percent increase in sales by volume 2011-2016. From 2007-2016, this would be a 34.7 percent increase in Canadian wine consumption.

That same study also predicted continued growth in Canadian wine production to 2016, as new wineries start and existing wineries increase their output. The current estimated volume for 2012 was 5.65 million 9L cases, rising to 6.1 million 9L cases by 2016. However, imported wines will continue to dominate the Canadian market, a situation that Canada’s current wine distribution system doesn’t help.

On a world wide basis, the study showed wine consumption growing by 10.27 percent from 2007 to 2016. Growth in Canadian wine consumption is clearly running well ahead of that average.

Outside the Canadian context, most notable is the explosive growth in wine consumption in China. From 2007-2011, it leapt by almost 144 percent, and another healthy increase is predicted through to 2016. Faced with market constraints at home and burgeoning opportunities abroad, some Canadian producers are spending time in China fostering sales and to its credit, Niagara producer Pillitteri just announced that it would be selling its wines in up to 25 stores in China.

BMO Economics has also recently noted the increased Canadian production capacity and growing Canadian wine consumption (up by 69 percent between 1995 and 2011). In addition, last week, Norm Beal of Peninsula Ridge Estates Winery predicted that the 2012 Ontario vintage could be one of the best ever for Niagara producers due to the warm, dry summer. Given that the overall economic contribution of 100 percent Canadian wines is so much greater than for imported (17x in Ontario according to KPMG), getting those wines into the market place is a win-win for the economy and for consumers.

For Canadian producers, growing wine consumption in Canada and abroad is good news – there is a market for their products. So too is the prediction of an excellent vintage. But, as we know, the market system constrains the ability of Canadian producers to capitalize — they cannot fully reach their customers across Canada. Moreover, liquor board listings can never completely reflect the increasing range of quality products from Canadian wineries.

This only increases the imperative to remove wine trade barriers, give Canadian wine consumers better choice and follow the lead of progressive provinces like BC, Manitoba and Nova Scotia. Ontario, PEI and Saskatchewan will now allow wine consumers to bring wine in on their person but not via direct delivery. This is a short-sighted approach that flies in the face of consumers, undermines economic returns and ignores the intent of federal bill C-311.