Ontario’s wine industry has been flourishing in recent years, contributing significantly to the province’s economy and job market. With a retail beverage alcohol market valued at over $7.4 billion in 2020, and wine sales alone exceeding $2.2 billion, it’s clear that wine is an essential part of Ontario’s culture and economy.
In 2020, imported wines accounted for about two-thirds, or nearly $1.5 billion, of total retail wine sales in Ontario. The remaining one-third, valued at $700 million, consisted of locally produced wines. The LCBO retail stores, the largest distribution channel in the province, primarily sold imported wines, making up approximately 75 percent of their wine sales. Imported wines also dominated the premium wines category, with over 95 percent of sales in LCBO’s Vintages section.
The COVID-19 pandemic brought about some changes in the wine industry. To support struggling restaurants during this challenging period, the Ontario provincial government temporarily allowed alcohol sales with food as part of delivery or takeout orders. This measure has since been made permanent, offering additional revenue streams for restaurants. Additionally, several 7-Eleven locations in southwestern Ontario successfully obtained liquor licenses, further expanding the availability of alcoholic beverages.
Ontario has also seen a significant expansion in the number of grocery stores permitted to sell beer, cider, and wine. Currently, around 450 grocery stores across the province can sell beer and cider, and approximately 225 of them have permission to sell wine. This move has made it more convenient for consumers to access their favorite beverages, including locally produced wines.
In terms of Ontario-produced wines, there are three main categories. Ontario Vintners Quality Alliance (VQA) wines are made entirely from Ontario grapes and meet specific production standards. International-Canadian Blends (ICBs) are a mix of Ontario and imported wines, with a minimum of 25 percent Ontario grape content. The majority of wines produced in Ontario fall under the ICB category. Lastly, there are 100 percent Ontario wines, which contain entirely local grape content but may not meet all VQA production standards.
The wine distribution channels in Ontario include LCBO retail stores, on-site and off-site winery retail stores (including online stores), direct delivery to hotels and restaurants, and grocery stores. Additionally, Ontario Regulation 232 allows for the creation of wine boutiques within grocery stores. These wine boutiques operate using the grocery’s cash registers for sales processing, making it even more convenient for customers to purchase wine.
The wine industry in Ontario has received substantial support from the provincial government. The Wine Growers Ontario reported that the industry supports 22,300 jobs in Ontario and has an economic impact of $5.49 billion. The 2022 Ontario budget extended the VQA Support Program until 2024/25 and increased funding from $7.5 million to $10 million. The budget also renewed the $10 million COVID Recovery Fund for 2022/23. These investments demonstrate the government’s commitment to supporting the growth and recovery of the wine industry.
Furthermore, the province introduced the Ontario Staycation Tax Credit, providing a 20% personal income tax credit on eligible accommodations between January 1 and December 21, 2022. This measure aims to encourage Ontarians to explore local destinations, including the picturesque wine country of Ontario.
Recognizing the importance of responsible alcohol consumption, Canadian wineries launched The Right Amount initiative. This campaign provides resources and information to help Canadians make informed and responsible decisions about alcohol, with a focus on moderate wine consumption. It includes an online winery resource hub, voluntary promotional materials, and a consumer website with low-risk drinking guidelines and a drink calculator to determine the number of standard drinks in a glass or bottle based on volume and alcohol percentage.
The wine industry also saw political stability at both the federal and provincial levels. In the 44th federal election, the Liberals returned with another minority government, ensuring continuity in key ministerial portfolios such as Finance, Trade, and Agriculture. This stability is crucial for finalizing details on the excise replacement program, which is eagerly awaited by the industry.
At the provincial level, the Ford government returned with an even larger majority, instilling confidence in the wine industry. Moreover, the leaders of the NDP and Liberals both stepped down, signaling a potential shift in the political landscape. This continuity and stability provide a conducive environment for the wine industry’s growth and development.
One of the notable initiatives supporting the wine industry is the Wine Sector Support Program. This program, with a budget of up to $166 million over two years, aims to facilitate investment in the future growth and success of the industry. Wineries in Ontario and across the country are eligible to receive non-repayable grants based on their production of bulk wine fermented in Canada from domestic and/or imported primary products. This program demonstrates the government’s commitment to fostering a vibrant and competitive wine sector.
The state of the wine industry in Ontario is promising, with a robust retail market, a diverse range of distribution channels, and significant government support. The combination of imported and locally produced wines caters to various consumer preferences, while initiatives like wine boutiques and expanded grocery store sales make wine more accessible than ever before.
The economic impact of the wine industry, along with the thousands of jobs it supports, underscores its importance to the province. The increased funding and extension of support programs, coupled with initiatives promoting responsible consumption, reflect the government’s recognition of the wine industry’s significance and commitment to its continued success.
As Ontarians look forward to rediscovering their own province and exploring wine country, the wine industry is poised to play a vital role in the province’s economic recovery and growth. Whether enjoying a glass of VQA wine made from 100 percent Ontario grapes or savoring an International-Canadian Blend, wine lovers have an abundance of options to choose from in the diverse and flourishing Ontario wine industry. Cheers to the continued success of Ontario’s wine industry and the enjoyment it brings to residents and visitors alike.
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