gary’ s corner
By Gary Hewitt, MSc, CWE, SGD, AIWS
Photo by Paul Martens
B. C. Wines Play Hard to Get British Columbia is the toughest market in the world for us to get competitive pricing. We know the wines are great, that they are developing a unique regional character, and the standard of winemaking constantly improves. We often hear from customers just home from a trip the Okanagan,“ Please bring in this wine, it’ s fabulous and costs only $ 18.”
We hear you, and we check out lots of requests, but with the exception of the bigger wineries that need to sell wines east of the Rockies, we have trouble negotiating wholesale prices that work. Does your fabulous B. C. wine seem so great at $ 36? Not likely.
Why does this happen? It all has to do with the pricing structure enforced by the British Columbia Liquor Distribution Branch( BCLDB). Estate wineries have legislated options regarding the routes by which they can sell their wines: the retail price will be the same, but the margins are dramatically different. Consider a wine sold at a BCLDB-mandated price of $ 25, including sales tax. If sold at the winery cellar door, the winery will retain 88 % of the sale. If sold to a private liquor retail store, the percentage retained drops to 74 %. If sold to a special
VQA store under the auspices of the B. C. Wine Institute and dedicated to only B. C. wines, the percentage drops to 62 %. If sold to the BCLDB, the margin is even lower.
If the wine is sold to Manitoba and the shelf price is to be $ 25( not including sales taxes), the wholesale price represents only 43 % of the sale! The winery makes about half of what they can make selling the wine at their cellar door.
If the wine is sold to Manitoba at the wholesale price given to the B. C. VQA stores, the Manitoba shelf price would be about $ 36; if sold to us at the cellar door wholesale price, our shelf price would be about $ 50!
If you were a small estate wine producer in the Okanagan, what would you do? I can tell you that I would sell as much as possible at the cellar door. I would not be looking to sell my limited production to Manitoba.
Without a doubt, the pricing scheme is strongly biased in favour of the B. C. market, a trait that has not gone altogether unnoticed by our foreign trading partners involved in free trade agreements. But before we advocate for enforcement of a level playing field, consider that Canada is an expensive country in which to produce wine. For example, in the Okanagan, land prices are high, labour and supplies are expensive, and the wine industry is relatively small with few economies of scale. In short, wine production is expensive. Strict compliance with trade agreements may drive up the cost of B. C. wines across the board: how will we feel if that“ fabulous $ 18 bottle” of B. C. wine is the same price in B. C. and Manitoba, but now costs $ 36 in both provinces? I suspect that neither the small estate producers nor consumers will rejoice.
In the meantime, Manitobans can enjoy wines from the big players of the B. C. wine industry, many of whom belong to large international beverage corporations that can afford to offer competitive wholesale pricing, or wines from a handful of medium-sized estate wineries who pay the penalty to sell outside of B. C. But I suspect that greater numbers of Manitobans will take advantage of the recently relaxed interprovincial laws to bring home wines from their visits“ out West” or to order winerydirect and have wines delivered to their front door. �
BLUE MOUNTAIN, EXCEPTIONAL
Just as I thought I’ d pinned down the situation in B. C., we finalized arrangements with Blue Mountain Vineyard and Cellars that prove the exception to the rule. Blue Mountain, a fiercely independent estate winery since their inception in 1971, forged a reputation for outstanding Pinot Gris, Pinot Noir, and sparkling wine outside of the auspices of VQA. Limited allocations and high demand governed distribution with only a trickle escaping B. C. into Alberta. But now Blue Mountain is ready to play in Manitoba with market-competitive prices. We are thrilled to present Blue Mountain and encourage you to support their commitment to our market.
Blue Mountain Vineyard 2011 Pinot Gris $ 24.99
Blue Mountain Vineyard 2011 Chardonnay $ 24.99
Blue Mountain Vineyard 2011 Pinot Noir $ 29.99
Blue Mountain Vineyard nv Sparkling Brut $ 24.99
www. banvilleandjones. com 31