Tough times ahead for small Niagara wineries

Ontario winery representatives and at least one Niagara politician continue to rally for the renewal of an LCBO rebate program that some insiders say is crucial to the survival of many small wineries this year.

Without the LCBO incentive program-- which offers wineries 30 per cent return on every Vintners Quality Alliance bottle sold through the provincial liquor stores -- several wineries will have to rely once again on selling their products solely through their own retail stores.

With a recession gripping the globe and tourism expected to slump this summer, things could get rough for many Niagara wineries, particularly small ones, say industry insiders.

Some may be forced out of business unless the LCBO rebate program returns, said Norm Beal, chairman of the Wine Council of Ontario.

"I think that this program is absolutely critical and that it has to

come back," said Beal, president of Peninsula Ridge Estates Winery in Beamsville.

"If it doesn't come back then I paint a very grim picture for the industry, going forward."

Niagara West-Glanbrook MPP Tim Hudak agrees, and is calling on the province to renew the three-year VQA Wine Support Program. The $10-million program, introduced by the Liberal government, expired March 31.

There was no mention in Thursday's provincial budget of renewing the program.

The program is helping wineries, Hudak said.

Previously, craft wineries found it was not profitable to sell their wines through the LCBO. Through the LCBO rebate program, wineries take home about half the profits of wines made with 100 per cent Ontario grapes. The program has resulted in more than 50 wineries placing top craft wines at the LCBO, up from 15 when the program launched in 2005.

Hudak said fewer wineries -- faced with steeper fees and taxes -- will likely sell their wines through the LCBO once the program is pulled.

"This budget should have been focused on job creation," said Hudak, a Progressive Conservative finance critic who is expected to run for the Tory leadership.

"This program helps create jobs in the grape and wine sector and supported agriculture. Frankly, it was a very short-sighted move of the government to cancel that program, particularly in these difficult economic times."

St. Catharines MPP Jim Bradley told The Standard on Friday the government is aware of how important the LCBO program is to the industry, and is open to requests for it to continue.

Bradley said he was waiting for the outcome of ongoing talks between the province's grape growers and wineries designed to chart a course for the wine industry.

Last December, the province ordered the two sides to get together and create a plan after a huge grape surplus last fall that resulted in a $4-million bailout program for grape growers. More than 2,000 tonnes of grapes from 79 growers were dropped to the ground last fall.

But many more grapes may go unsold again this year if the wine industy struggles, Beal said.

The government has to step up and help the industry, and bringing back the LCBO rebate program is a crucial part of that, Beal said.

"I got to tell you we're in the same kind of pressure as ever ybody else is. I don't know why everybody thinks the wine industry is any better. Our banks our breathing down our necks."

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