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Canadian Wine May Soon be More Canadian

Wineries promise to change "Cellared in Canada" labels, but after the Olympics

Konrad Ejbich
Posted: January 25, 2010

Outcry in Canada over the widespread practice of bottling foreign bulk wine and selling it as "Cellared in Canada" has temporarily subsided, after wineries promised to make changes to misleading labels.

It's a longstanding quirk of Canadian wine law. Several 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. Typically, the phrase appears in tiny typeface on the back label, often in a color that makes it difficult to distinguish from the label itself. 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.

Canadian grapegrowers protest that every year an increasing tonnage of domestic grapes rots on the vine because the biggest buyers in the wine industry favor buying cheaper foreign fruit.

Now a committee made up of winery executives and members of the Liquor Control Board of Ontario (LCBO) has proposed eliminating the "Cellared" term (CiC) and printing "Blended from International and Canadian Wines" on the front of bottles. The recommendations are now in the hands of Ontario's Ministry of Consumer Services and the Canadian Food Inspection Agency, which regulates food and alcohol labels on a national level. Meanwhile, other changes are already being implemented in the provinces.

CiC producers have profited significantly from CiC wines, sometimes from consumers who think they are supporting local wines. In a recent radio interview, John Peller, CEO of Andrew Peller Ltd., the country's second-largest winery, admitted that 60 percent of his company's revenue came from selling CiC wines. Canada's largest wine companies all bottle vast amounts of CiC wine under most of the country's biggest brand names.

But public pressure to end the practice has grown, especially as small wineries in British Columbia's Okanagan Valley and Ontario's Niagara Peninsula have grown and prospered. The outcry has prompted the two provincial governments to respond.

In British Columbia, Rich Coleman, the government minister responsible for the British Columbia Liquor Distribution Branch, ordered all government-owned stores to produce new signage clearly differentiating "BC-VQA—100 percent British Columbia Wine" from "Bottled in British Columbia from International and Domestic Wine."

Coleman also called for the re-shelving of wines to separate CiC products from VQA bottles. He said he would continue to allow wineries to bottle 100 percent foreign wine and label it as CiC, however.

In Ontario, where CiC wines must contain a minimum of 30 percent local juice, the government has stepped in with measures it hopes will steer the industry in a new direction.

The LCBO will not be asked to re-shelve CiC products in its 600 stores, but wine-content legislation will be changed to immediately increase the domestic portion of CiC wines to 40 percent. In addition, CiC wines sold through private winery-owned stores will be taxed at a higher rate, and the extra revenue will be used to promote VQA wines.

Even if the proposed new label language is approved, however, according to one industry spokesperson, any changes to labels will not appear until after the Vancouver 2010 Olympic Games. During the winter games next month, up to 1 million visitors will be in the country, and many are expected to take home souvenir bottles of Canadian wine.

"New labels can't be ready in time for the Vancouver Olympics," said Bruce Walker, a vice president of Vincor Canada, a subsidiary of Constellation Brands and official wine sponsor of the 2010 Olympics. "However, every one of our brands sold in Olympic venues will be 100 percent VQA."

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