Vintners, brewers 'thrilled' with additional supports in Ontario budget

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Ontario’s vintners and brewers are thrilled with the support provided by the province in its latest budget, saying it helps stabilize the industry in uncertain times.

The province is set to launch the Ontario Grape Support program that will double the percentage of Ontario grapes in blended wine.

The $175-million program, to be doled out over five years, is expected to lead to thousands of tonnes of Ontario grapes making their way into the international-domestic blends and provide a safety net for wineries and farmers, said Aaron Dobbin, the president of Wine Growers Ontario.

“This is a huge day for us,” Dobbin said.

Currently, blended wines must contain at least 25% Ontario grapes, which are then blended with wine from other countries such as Italy, France and the United States.

Blended wines are cheaper compared to traditional wines and offer Ontario vintners and grape growers the ability to compete with international wines that go for $10 a bottle.

“It will significantly increase demand for Ontario grapes, which will help farmers,” Dobbin said.

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Those wines are made with hardier Ontario grapes, which can help when catastrophe strikes.

“You can grow them in higher volumes and they’re not as susceptible to Mother Nature,” he said.

Details of the program are still being ironed out, Dobbin said.

The province is also expanding the Vintners Quality Alliance wine support program, an $84-million annual fund that helps wineries grow their business. The program provides rebates to wineries when their products are bought at LCBO stores. Now the rebate will be expanded to sales at wineries.

“Particularly those smaller wineries that rely heavily on gate sales, it’s a big, big deal for them,” Dobbin said.

Craft brewers are also applauding the province’s moves to help their sector.

The province is providing relief to microbreweries by cutting the microbrew tax rate and the LCBO mark-up rate by 50% each.

The moves have created stability in the industry, said Natasha Fritzley, president of Cowbell Brewing in Blyth, Ont., and a board member of Ontario Craft Brewers, a trade association that represents more than 100 small, independent brewers.

“Was I happy and thrilled with what the government delivered on for us? We really all truly were, it’s very meaningful,” Fritzley said.

“This will drive tourism, this will grow jobs here in Ontario.”

Fritzley said the tax changes are so important because it sent a signal from the province that Ontario is a place where a business can grow.

“We’re investing immediately in a 10,000-square-foot warehouse in Blyth and in a pasteurizer for our products with this news,” she said.

“What it does is it gives us that breathing room and confidence to say, ‘Hey, this is an environment that we’re willing to invest in despite the unknown,”‘ Fritzley said.

“And there are a lot of unknowns right now.”

U.S. President Donald Trump’s tariffs and his ongoing trade war with much of the world has affected Canada’s booze industry, largely through the tariff on Canadian aluminum.

While the metal is made in Canada, it is then shipped to the U.S. to be turned into beer cans or lids before being shipped back.

But that has led to wildly different prices as suppliers and brokers try to figure out how to implement the tariffs, Fritzley said.

The tariffs have also caused instability, she said.

But Trump’s moves are also spurring more Ontarians to buy from Ontario businesses, she said, though her shop hasn’t seen an increase in sales yet.

But there could be more business coming.

In response to Trump, Ontario Premier Doug Ford has tabled legislation that, when passed, will open free trade with other provinces. Alcohol has long been a sticking point between provinces, but Ontario’s new rules will allow direct-to-consumer sales with other provinces that have reciprocating laws.

Ford has signed free-trade memorandums of understanding with Nova Scotia, New Brunswick and Manitoba to allow for direct-to-consumer alcohol sales. He hopes to sign bilateral deals with each remaining province and territory within the coming months.

That should open new sales channels for wine- and beer-makers.

“For those smaller wineries who are focused on higher-priced wines, it’ll be particularly helpful for them in creating a channel that they can take advantage of,” Dobbin said.