A golden goose

Last week, we detailed how Vincor had evolved, from strength to strength, to dominate Ontario wine sales. After acquiring vineyards in B.C., Quebec and Ontario, Vincor, along with Andrew Peller Ltd., were given further leverage when they were granted licences for off-site retail stores (usually located at the exit of major grocery chains). Today, Vincor operates 164 outlets called “The Wine Rack,” Andrew Peller Ltd. operates 104 outlets named “The Wine Store,” and smaller wineries own 24 other wine shops.

These licences were grandfathered into the NAFTA accord, which prohibits any further expansion in this market niche. Unlike The Beer Store, these wine stores can only retail their own brands—some of which can contain as much as 75 per cent foreign wine blended with Ontario wine. It is like a wine version of the CRTC—assuring some Canadian content is available in the larger consumer market. Like The Beer Store, however, the size and number of off-site wine stores attracted the attention of foreign buyers. In 2006, the shareholders of Vincor voted to become a subsidiary of Constellation Brands, a major wine and spirit company based in New York.

The blending of off-shore and domestic wine was initially allowed to assist a struggling local wine industry. These specialty wine shops were therefore taxed at a low rate of 16.1 per cent (which they continue to enjoy). Wines sold through the LCBO are currently taxed at 66.5 per cent, so you can imagine the Ontario Treasury is taking a hard look at these licences. Continuing to favour major international conglomerates with preferential market positioning is the result of strong lobbying and weak government policy. In today’s fiscally challenging time, however, I am confident that the present government will consider taxing this hitherto golden goose.

I have always supported the simply great wines that are produced in Ontario. If I want a Chilean or Californian wine, however, I usually purchase such wine from the LCBO Blending local with foreign bulk product— while good for the bottom line—does little to favour the reputation of our Ontario wine industry.

THIS WEEK’S PICK
This week, I was seduced by a delightful 2015 Gewürztraminer crafted by the talented Rob Peck of Sugarbush Vineyards.

The wine is a cornucopia of aromatics, showing traditional rose petals and freshly peeled lychees that continue on the palate. The wine has a delightful suggestion of black licorice on the end, which makes this wine so very pleasant.

Available at the winery on Wilson Road (and also at the LCBO), it costs $18 per bottle.