Unlike other wine regions, where surpluses were a result of over-enthusiastic planting, Ontario’s surplus is driven to a large degree by the needs of large factory wineries. In 2009, those wineries purchased nearly 14,000 fewer tons of Ontario grapes despite strong sales of Cellared in Canada (CIC) wines. In 2010, the problem will likely worsen as CIC producers weigh their options and decide in favour once again of purchasing fewer Ontario-grown grapes. They have said as much in memos to grape growers.

There are a number of forces that contribute to a lack of market for Ontario wine grapes:

1. The Ontario government has announced an infusion of $57 million over the next five years, to go almost entirely to maintain the status quo by channeling this money only to VQA, WCO and Grape Growers of Ontario members.
2. The reinstated VQA Margin Enhancement Program benefits only VQA wines and only wine sold through the LCBO. VQA wine sold through winery stores, fruit wines, meads and other 100 per cent Ontario-grown wines are excluded.
3. The Margin Enhancement Program provides less actual money per bottle than previously.
4. The new minimum domestic per-bottle content for CIC wines has been lowered to 25 per cent from 30 per cent, which will result in CIC producers purchasing fewer Ontario grapes.
5. CIC producers can now credit their VQA production toward the domestic content in their blended wine products, which also reduces their need to purchase Ontario grapes.
6. The new tax on CIC wines further reduces the incentive for these producers to purchase Ontario grapes in 2010 and beyond.
7. The push to enhance Ontario’s vinifera grape production will result in more vinifera grapes on the market even though these are the very grapes that have created the surplus. CIC producers would rather purchase less expensive hybrid grapes for blending.
8. There has been no effort to address the issue of low-priced imported wines. Ontario wineries can compete in the under $10 market if given the means to do so, such as the option to grow high quality hybrid grapes (which are generally better suited to Ontario’s climate) and recognition of Ontario-produced non-VQA wines.
9. There has been no change to rules that restrict the amount of raw material small wineries can purchase. For example, so-called fruit wineries can produce no more than 20 per cent of their wine from grapes, whereas traditional wineries can make as much fruit wine as they wish and CIC producers can increase their CIC production as much as they please. Many smaller wineries would be happy to purchase more Ontario grapes if given the opportunity.

Given that a litre of 100 per cent Ontario-grown wine contributes $11.50 to the Ontario economy, a single tonne of grapes left to rot is a loss to the province’s economy of $8,050 (2008 KPMG study), 1,000 tonnes hitting the ground would cost us all over $8 million, and 16,000 tonnes means in excess of $128 million in lost opportunity. (A tonne of grapes yields 700 litres of wine.)

The Ontario Viniculture Association (OVA) calls on the Ontario government and Greenbelt authorities to act while there is still time. The government must give Ontario wineries better access to Ontario grapes and to the marketplace by any or all of the following:

• Require that all wineries be included in beneficial payouts of government funds.
• Give all wineries the same rights and privileges in purchasing grapes.
• Encourage increased grape purchases in abundant harvest years.
• Allow fruit wineries to purchase grapes without arbitrary limits.
• Allow wineries in non-designated viticultural areas the opportunity to purchase more non-local crop in good years.
• Recognize (and help the public to recognize) non-VQA, 100 per cent Ontario-grown wines by allowing them to use the Foodland Ontario logo.
• Help wineries find ways to compete in the under $10 category.

OVA is a group of 104 Ontario winery members, with a further 67 associate member wineries throughout Canada.