#Ontwine & private liquor stores in Ontario- my OpEd #bomb

  Back in August of 2012 I wrote an Op-Ed on how the Ontario Government could utilize private liquor stores to help support and grow the Ontario wine industry. I sent the Op-Ed out to 369 Ontario media contacts who were clearly so excited about an Op-Ed from a Conservative backbench MP from BC exactly none of them (to the best of my knowledge) ever published it. As Op-Ed media campaigns go, it was a complete disaster. 


  So what has changed since 2012 when I first wrote this particular Op-Ed? BC now has over 270 wineries– that is huge growth and is part of the reason why the BC wine industry is now credited with having an
economic impact of $2 Billion dollars. Part of the credit for this success is owed to the BC Provincial Government who consistently has demonstrated leadership in consistently adopting Canada’s most progressive wine laws - some of these policies are noted in the Op-Ed I sent out.  

  When it comes to wine policy, currently the Province of Ontario continues to support the status quo and restrictive pro-LCBO monopoly policies such as opposing the Free My Grapes inter-provincial
movement of wine and opposing increasing private retailing options that can benefit the wine industry.  As there is again some discussion on the topic of private liquor stores again in Ontario here is my original Op-Ed on this subject that was sent out in 2012:

How the Ontario Government can better support the Wine Industry, taxpayers and consumers

  During my recent work in Bill C-311 that amended the prohibition era “Importation of Intoxicating Liquors Act” I became very familiar with Canada’s various liquor jurisdictions as they exist among our Canadian Provinces. One fact that I found both surprising and disappointing is that currently nearly 7 out of every 10 bottles of wine sold in Canada are imported from other countries. We know Canadian wineries produce some of the best wines in the world and yet our own domestic market is largely dominated by foreign wines. How can we reverse this trend and expand our Canadian wine production?

  It is important to recognize that constructing even a modest sized family winery can require an investment of roughly $7-$10 million and production can take between 3-5 years before significant cash flow is generated in return. The biggest challenge facing most small Canadian wineries is a lack of retailing options. Currently many liquor jurisdictions (such as the LCBO) can charge what amounts to close to a 50% “commission” to retail wine. Small wineries simply lack the production quantities to be able to afford these significant costs. The alternative to paying hefty LCBO fees is to sell directly from the winery, a practice known as “cellar door” sales within the industry. However there is another option.

  In British Columbia the Provincial Government has introduced private liquor stores to compete against the Government Liquors Stores. A Private liquor store operates on a 16% discount they receive off the public posted pricing and otherwise absorb all costs of retailing beer and wine.  For taxpayers this amounts to a gross return of 84% and yields more net revenue when compared to selling through far more costly Government run liquor stores. More importantly for the BC wine industry is that there are now close to 700 private liquor stores that sell BC wine without the costly fee structure imposed in selling through the Government liquor stores. For consumers there is not only more access as a result of better hours, there is also considerably more selection courtesy of competition between the private liquor store operators.

  As a result of progressive policies such as these, there are now over 200 wineries in British Columbia with more in the planning and licensing phase. Unfortunately the roughly 130 Ontario VQA wine
producers currently lack the retailing options that exist in British Columbia as a result of the archaic practices of the LCBO and a failure of the Ontario Government to take a more supportive role for the industry. Increasingly retail options with the private sector can net more revenue to taxpayers,
increase choice and access for consumers and support Ontario grape growers and wine producers. This is a win/win scenario for all involved.

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