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Protest Mounts Over "Cellared in Canada" Wines

Ontario grapegrowers claim their fruit is rotting while big producers import bulk juice

Konrad Ejbich
Posted: August 28, 2009

It's a longstanding quirk of Canadian wine law: "Cellared in Canada." Several Canadian provinces allow wineries to import bulk wine (the popular choices today are Argentina and Chile), bottle it and call it Canadian, as long as the back label contains those three magic words. In the country's two biggest wine regions, Ontario law requires such wines to contain 30 percent local grapes while British Columbia law requires no Canadian grapes.

But Ontario's growing boutique wine industry is now calling for an end to "cellared" wines, arguing that the time has come for Canadian to mean Canadian. They claim the practice is tarnishing the reputation of local wine and jeopardizing the livelihood of grapegrowers. They charge that big wine companies are importing bulk wine and marketing it as "Canadian," while domestic grapegrowers leave thousands of tons of fruit to rot on the vine.

"When we have wineries literally driving past vineyards full of Ontario grapes to pick up imported grape juice to make a blend, it is clear there is an issue," said Jim Warren, president of the Ontario Viniculture Association. Growers and small wineries are organizing protests outside wine stores and have called for a boycott. They've asked the Ontario government to enact clearer labeling of "Cellared in Canada" products, increase the percentage of Ontario grapes used in blended wines and significantly increase the availability of VQA wines in Liquor Control Board of Ontario (LCBO) stores. (VQA, or Vintners' Quality Alliance, is the appellation and quality organization that guarantees the authenticity of domestically-grown wines in Canada.)

Until now, few winemakers have been willing to speak out publicly against the practice of marketing foreign wine as Canadian for fear of antagonizing the LCBO, the government-owned monopoly that operates all wine stores and controls which wines are available on shelves.

"Cellared in Canada" brands dominate the limited shelf space allocated to domestic wine in LCBO stores. Less than 2.5 percent of the monopoly's listings are dedicated to wines made entirely from local grapes and labeled VQA. The vast majority of "Canadian" wines sold by the LCBO are, in fact, foreign blends. If a local boutique winery can't make LCBO's list, their only option is direct sales.

The Ontario Greenbelt Alliance, an environmental group, held a public "grape stomp" last month, lobbying to "Put the 'O' back in LCBO.” There is also mounting pressure online, including petitions, blogs and a Facebook page dedicated to banning the "Cellared in Canada" designation.

The history of blending foreign juice with Canadian wine is long and complicated. In the 1980s, when the Canadian industry was in its infancy, the government granted wineries permission to use foreign wine while labrusca vines were being pulled up and replaced with vinifera in local vineyards. The practice of blending continued over the years for a variety of reasons, including occasional shortages in grape supply due to bad weather.

But the Canadian wine landscape has changed in recent years. There is a healthy supply of domestic grapes, and consumers are embracing locally made wines as never before.

One of the few winery owners willing to speak out on this issue is Seaton McLean, co-owner of Closson-Chase Vineyards. "Bringing in juice, in large quantities, does good things for the bottom line of the companies that do it, but if you have juice available at those prices, your need and desire to purchase more expensive Ontario juice becomes secondary," said McLean.

He agreed there is a market for blended wines, but is lobbying to eliminate deceptive packaging. "There's a strong similarity in the labeling, the choice of bottles and the capsuling. I have close friends who will tell me proudly that they bought Ontario wine but when I press them, it turns out they actually bought 'Cellared in Canada' wine."

The larger wineries that produce Cellared wines argue that the growers only have themselves to blame for overplanting and that local grapes are too expensive. "By bringing in foreign wine to blend with the local wine, it allows us to compete in the under-$10 category," said Bruce Walker, executive vice president of government relations for Vincor International Inc., which is owned by Constellation Brands. "I would suggest less grapes be grown in Canada, or the prices of those grapes must come down to where they need to be."

The government has not acted yet. "We believe that the industry itself is best positioned to develop a long-term strategy that will address the current challenges," said Dwight Duncan, the Ontario minister responsible for the LCBO.

Scott Webster
Mississauga, Ontario, Canada —  August 29, 2009 9:50pm ET
This is really a shame, in the Niagara region the grape producers are having to waste 10's of thousands of tons of grape due to "over production" all the while the large players are inporting their bulk wine! Niagara region is producing very good quality wines and we certainly dont need to import any juice or bulk wines, buy VQA and be certain they are Canadian grapes used in the wine!
Howard Kaman
Vancouver, BC, Canada —  August 31, 2009 9:16am ET
Dwight Duncan's comment in the above article is typical government bafflegab... and Bruce Walker from Vincor's comment rings true. The simple fact is that the vast majority of sales are in the below $10 category dominated by Chile and Argentina (Fuzion anyone?) domestic grape prices can not compete with rock bottom rates paid for the foreign content from (guess where?) Chile and Argentina. The Government monopolies in both Ontario and B.C. will not increase shelf space for higher priced VQA wines (most of which are produced by smaller boutique wineries that are not in the 'Cellared in Canada' business) at the expense of the cheaper foreign-dometic blended wines that can compete pricewise with their South American competitors. A compounding problem is that most of these smaller producers do not produce volumes large enough to supply the LCBO in Ontario, nor do they wish to sacrifice most of their revenue to the government monopoly... they make more revenue that they can put back into their business by selling direct to consumers. It is time for privately run VQA wine stores in Ontario, as they have in BC... The LCBO should stick to imports only.
John H Trombley
Piqua, OH USA —  August 31, 2009 4:11pm ET
The way forward toward quality and enhanced reputation in Canada as for every country is to disentangle as much as possible from being a social welfare agency (even for the industry) and taking the risk to compete in the market. Whenever these risks are borne quality and value are enhanced for the consumer and wine and grapes are easily sold at the appropriate price points in a sustainable fashion. Examples of this can be found repeatedly around the world in the last 30 years, not least in Canada itself.

It's impossible to expect the Government to work itself out of a job, so industry pressure is the way to go. If this requires a vigorous debate within the industry that thinks it at least partially benefits by Government interventionism, so be it.

The impressive increase in quality among Canadian wines we've seen thus far is due to risk-taking, often by the smallest winemakers, but there is much to gain still by pursuing such policies!
Stacy Hughes
Regina, SK —  September 1, 2009 4:35pm ET
This does not surprize me one bit, and this has been going on for years. When I buy Canadian wines I only buy VQA Canadian wines as I know it is grown, and made in Canada. The biggest problem I have is availability of product that is VQA, and is a good quality wine, since many many good and great wineries are not available for purchase in Saskatchewan.
Darcy Kelley
Toronto, ON —  September 1, 2009 11:37pm ET
You have to laugh at a useless Ontario Liberal government that actually supports misleading product labeling: "the industry will sort it out." Nice one Dwight Duncan - the large distributors/marketers came up with the fraud. Consumers do have choices - including a boycott of "Cellared in Canada" wines - and the wines of Vincor.

On the matter of VQA designation, there is hardly any more integrity intrinsic to it. As I've said many times over the years, VQA is absolutely no assurance of product quality. It's like the French AOC (i.e. 98%+ of wines submitted for the designation end up being approved to receive it). VQA assures *origin* of grapes - not *quality* of wine. It is, yet again, another example of marketing fluff.

Ontario consumers are TOTALLY on their own when it comes to buying wine. How many LCBO locations in Ontario let you taste wine before you buy? I know of 2 (in Toronto) and you're limited to 2 samples.

People, show your disgust and get in the car; take a drive; and patronize the small, hard working mom & pop wineries throughout Ont that can't afford LCBO listings. Chances are you will be treated like gold, and be able to taste a RANGE of wines before buying. And know exactly what you're buying - what grapes, where they came from, etc. Does the LCBO offer anything close? No. Start giving the LCBO a pass.
Mark Hicken
Vancouver, BC —  September 2, 2009 3:07pm ET
Thanks to Wine Spectator for bringing industry attention to this issue. The situation in British Columbia is just as bad if not worse. The BC government liquor stores display "cellared in Canada" wines underneath signs that say "British Columbia". It is, in fact, prohibited by BC wine laws to put "British Columbia" on the label of a foreign blend but they are skirting the law since the sign is not the label. Most consumers, however, are misled since they don't read the fine print on the label and just see the sign. It's high time provincial governments put a stop to this ... but, I'm not holding my breath, as they make too much money on liquor sales.

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