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Regional Winemaking Should Be Profitable As Well As Fun

The executive board members of the EPIC Winegrowers Association, from left: Jean Qian, Vivace Estate Winery; Steve Wilson, Oxley Estate Winery; Melissa Muscedere, Muscedere Vineyards; Dylan Reimer, Pelee Island Winery and Steve Mitchell, Sprucewood Shores Estate Winery. Photo courtesy of EPIC.

Regional Winemaking Should Be Profitable As Well As Fun

The Ontario government is undertaking a comprehensive review to get further information on its plan to expand the sale of alcoholic beverages into corner, grocery and big box stores.

As part of this review, the government has committed to reviewing the tax regime for alcoholic beverages.

This is the promise of Premier Doug Ford, and it was a focus of a late spring conversation I had with two of Essex County’s young movers and shakers in the domestic wine industry.

I sat on the patio of the retail tasting room at Muscedere Vineyards Estate Winery with Melissa Muscedere, President of the Essex Pelee Island Coast (EPIC) Winegrowers Association and EPIC Vice President Steve Wilson of Oxley Estate Winery, talking about the aspirations of the burgeoning wine industry in Essex County.

It turned out to not be an ideal place for an interview. A baby goat, which had arrived at the farm earlier that morning, was running back and forth on the patio’s periphery, interrupting our discourse with blood curdling cries.

Wilson wisely suggested that we move inside where it was quiet, and I was soon sampling a glass of Muscedere’s 2016 Cabernet France, an exceptional medium-bodied wine, from the bar.

I received a crash course from the EPIC brass on what it takes to operate one of 17 wineries in Lake Erie’s North Shore winery district. It takes a mixture of Canada’s most ideal climate for grape growing with the passion and dogged work ethic of vintners, many of them young offshoots of farming parents.

“These are family businesses, with family members doing the majority of the work,” explains Wilson, who has helped his parents sustain the Oxley winemaking while running a skate sharpening business with his father Murray.

Oxley Estate Winery, 533 County 50 Road East in Harrow, was launched only 10 years ago by planting 17 acres of grapes.

“Winemaking is a calling of creativity,” continues Steve. “You have to be passionate. It’s a phenomenal amount of work. You’re not making money, and when you do it goes right back into the winery.”

The story is the same for the Muscedere farm, purchased by the family in 1986, and transformed into vineyards beginning in 2001.

Located on 7437-7549 County Road 18 in Harrow, the enterprise is overseen by two parents, two sons, one a full-time teacher, and front person Melissa, who calls winemaking “a labour of love.”

Most of the 17 wineries in Essex County are recent arrivals, launched since the turn of the century.

Interestingly, the Lake Erie North Shore is one of Canada’s oldest grape growing regions, begun on Pelee Island in 1871. But, winemaking disappeared for over a half century until 1979 when grape growing was reintroduced to the island.

Today Pelee Island Winery is located on the mainland, having moved to 455 Seacliff Drive, Kingsville in 1982.  (They also have the Pelee Island Winery Pavilion, 20 East West Road, Pelee Island).

Colio Estate Winery in Harrow, established in 1980, is the other pioneer.

The growth spurt has put the Essex Region into the top three most important districts in the province, along with Niagara and Prince Edward County.

Symbolic of this is the lead role the Windsor-Essex Regional Chamber of Commerce has taken in pressing the provincial government to eliminate crippling taxes on the domestic wine industry that have kept people like Melissa and Steve slaving away for no financial returns.

Unlike other winemaking countries and provinces, Ontario imposes a 35 percent import tax and a 6.1 percent retail store tax on wine produced by their own small to medium family-owned businesses.

It is estimated that the two taxes together add $4 to the cost of a bottle of domestic wine purchased in the Liquor Control Board of Ontario (LCBO) outlets or in the three big retail store chains — Loblaws, Metro and Sobeys — licenced to sell wine in the province.

These unfair taxes were brought to the attention of local chamber President and CEO Rakesh Naidu by Tom O’Brien of Harrow’s eight year old Cooper’s Hawk Vineyards (1425 Iler Rd, Harrow), which is undergoing a rapid expansion of its food and wine operations.

Naidu, appointed to the top chamber job last December, quickly took up the torch and after consulting area industry experts concluded the tax upon a tax doesn’t make sense.

At the Ontario Chamber of Commerce’s annual general meeting on April 4, 2019 Naidu won unanimous approval for Essex Region’s resolution urging the government to eliminate the two taxes and end the LCBO’s monopoly on the sale and distribution of Ontario wines.

Right now the mark-up for Ontario wine is exactly the same as imported wine. That’s because the government-owned LCBO has a monopoly that allows it to serve as the importer (1st tier), distributor (2nd tier) and retailer (3rd tier) in our home market. Ontario’s domestic wines are taxed the same as international wines due to international trade obligations.

In the U.S., wineries are not subject to an importer mark-up. The Ontario wineries want the same tax treatment as their foreign competitors.

This can be achieved by enabling domestic wineries to direct deliver to new private retailers. For wines sold through the LCBO, there should be a rebate or tax credit for that import portion.

Ontario-made wine holds a measly 24 percent of the LCBO’s market share, a pittance compared to other wine-producing nations, who heavily subsidize their domestic winemakers.

The Ford review will no doubt carefully examine the revenue the LCBO will lose by agreeing to the chamber recommendations. The finance ministry reports that the LCBO cash cow is expected to generate $2.3 billion in revenue this year.

EPIC is a marketing coalition consisting of 12 wineries on the Lake Erie North Shore promoting events throughout the year to bring customers to their wine tasting bars, restaurants and banquet facilities. These money-making accessories to the actual regional winemaking have become necessary to the industry’s survival.

In June, EPIC introduced a marketing partnership with Tourism Windsor Essex Pelee Island (TWEPI) in which a $25 digital tasting pass offers complimentary tastings, premium samples, a free wine glass and vineyard tours at the 11 participating wineries. You can purchase a pass online.

Meanwhile, Oxley’s Steve Wilson can hardly harness his excitement at the prospect of the chamber’s reforms coming to fruition.

“We’re ready to go,” he informs me. “There is vast potential to become a world-wide player.”

His father Murray, the local representative on The Wine Council of Ontario, predicts the number of wineries could increase to 50 or 60 in southwestern Ontario.

TWEPI reports that our region’s share of Ontario’s $3.3 billion wine economy has been identified as a key source of revenue generation and job creation. Every bottle of Ontario wine generates $40 of economic impact, according to TWEPI.

Surely that’s something free enterpriser Doug Ford can understand.

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