Winemakers seek tax changes to boost their sales

Winemakers in this country are looking for some government help in their battle to gain market share.

In countries such as Australia and the U.S., domestic wines capture the lion’s share of the market — but winemakers here have only a 30 per cent share, industry officials told the House of Commons agriculture committee.

The government could help make domestic wines more competitive through an excise tax exemption for the Canadian grape content in international and Canadian blended wines, said Murray Marshall, of Diamond Estate Wines & Spirits and a board member of the Winery and Grower Alliance of Ontario.

“This is the largest segment of the wine sales in the marketplace, representing 73 per cent of all Ontario wines sales,” said Marshall.

“Trust me, even a one per cent or two per cent change in market share has real significance in terms of the growth of our industry,” added Patrick Gedge, the alliance’s president and CEO.

Marshall also called for “a specific initiative or allocation that supports the domestic marketing and new product development of Canadian wines.

“Wineries make significant investments in the development and launching of new products each year in order to be competitive,” he argued. “This should be encouraged through government programming so that constant private-sector innovation is recognized. Together we can leverage the economic ability of our industry to produce new jobs and new revenue to government.”

He also said Ottawa shouldn’t undermine the industry’s struggle to remain competitive through deregulation of container sizes, which it controversially proposed in the 2012 budget.

Removing standard container size regulations would allow foreign suppliers to flood the Canadian market, Marshall said.

“Our biggest vulnerability with such a change is our bag-in-a-box products,” he said. “Today, that represents 31 million litres of sales each year. The economic impact of these sales is some $688 million to the Canadian economy.”

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