Wine industry report predicts rapid growth, with widespread economic benefits for Ontario
There is a growing sentiment that the Ontario wine industry is poised to move to a new level, bringing with it major economic benefits for a variety of related sectors.
A report this week by the Wine Marketing Association of Ontario predicts the number of visitors to the province’s wine regions will rise to 3 million a year by 2030, from 2.6 million now.
It also projects “a 75 per cent increase in capital investment by Ontario wine producers, with four million new vines planted over 20,000 acres” and “more than 40,000 direct and indirect jobs in Ontario’s grape and wine production, tourism and hospitality sectors.”
The report comes on the heels of a major speech made by John Peller, chairman and CEO of Andrew Peller Ltd., at a gathering in Niagara-on-the-Lake sponsored by the town’s Chamber of Commerce, and attended by a mix of local politicians and leaders from business, tourism, theatre and wineries.
“There is no other industry that has greater growth impact on economies than premium wine-based economies. It’s a very bold statement, but it also happens to be true. It’s not rhetorical. It’s not hyperbole. It’s not conjecture. It’s an economic fact,” Peller said.
He is out to prove that economic fact by looking at international wine regions and demonstrating how their wine industries have enriched their economies.
“Building a premium wine industry has such incredible benefits to so many people in so many ways that it needs to be understood, validated and be indisputable,” he said.
“Just looking at France and Italy, their tourism economies are number one and number two in the world. And they believe it’s only because they have the best wine and food culture. Tourism is about 15 per cent of their GDP in both their countries. Our tourism is barely 1 per cent (of our GDP).”
For Peller, that spells opportunity.
“We have a population of 14 to 30 million people around us that don’t really have a lot of luxury food and hospitality competition, and that’s why we are popular now. But it’s also why we want people to see us as a world-class destination. That’s our ambition.”
His recipe to get there is to do even better at the things we already do well.
“We have some natural, competitive advantages for us, like wine and food, and our history and our theatre, and our parks and the recreation amenities that we offer,” he said.
“We need to make sure we go out and find who does all this the best in the world and make sure we set a best-in-the-world benchmark.”
Peller’s vision includes expanded theatre offerings, improved transportation, premium wine and food experiences, and iconic luxury accommodations.
And he has plans to create one of those luxury hotels by expanding Riverbend Inn.
Peller said the proposal is in a very preliminary planning phase and still evolving.
“We’re working on community outreach, working with town planning, and getting support for the project, so there’s a lot of work to do over the next six months.”
Peller called on leaders from all related sectors to join efforts, saying, “As stakeholders we have stayed in our own lanes and that hurts policy and support.”
Citing taxation policies and lack of support for the industry, Peller emphasized the need for “government and policymakers to unite around the reality that building a premium wine industry has such incredible benefits to so many people in so many ways.”
The Niagara wine industry has long lamented that other jurisdictions around the world, and even within Canada, get a better deal from their provincial governments.
Paul Bosc, president and CEO of Chateau des Charmes winery, was among those at the presentation.
Speaking to The Lake Report afterward, he explained that “even in B.C., wineries have a better deal. There is a VQA support program and their rebates are 10 times the value of the program in Ontario, to the tune of tens of millions of dollars.”
Peller noted, “Our company is way more invested in the Okanagan (in British Columbia) than we are in Niagara, (because) we have challenges with the policies that support the wine and hospitality industry here.”
One example on the tax front is a 6.1 per cent provincial tax on wine purchased at wineries, in addition to the HST. A petition to repeal that tax initiated by Ontario Craft Wineries has gathered more than 11,000 signatures, but the levy remains.
“I was incredibly insulted when they put two sales taxes on small winery gate sales,” said Peller.
“I mean, that’s just mean-spirited. Businesses are struggling to make a living and now you’re going to have two sales taxes. What other industry does that?”
He also pointed out that “we’ve got the same market share in the LCBO as we had 35 years back, a 26 share. What does it say to the people of Ontario when the government retail system doesn’t promote, honour and revere our product?”
Wineries in other jurisdictions, including both British Columbia and California, have another advantage unavailable in Ontario. They have the freedom of direct delivery, both to consumers and retailers.
“California wineries deal directly with consumers in 47 states so they’re not sharing their revenue with anyone. We have to go through the LCBO,” said Bosc.
Bosc said Peller’s vision is “spot on. We can’t forget how far we have come. The question is, are there ways to accelerate the future?”
“It’s going to happen, the question is how long is it going to take? Can we get more done in the next five to 10 years than the last 30?” Bosc said.
Peller appears determined to make it happen.
“We have a lot of ways we’re going to connect with people in the next few months,” he said.
“I think there’s kind of a realization that this is a big idea whose time has come and we’re not going to go further, unless we work together with that compelling vision in place. And don’t take no for an answer.”