The LCBO - Part 3

3. Supporting the domestic wine industry and providing it with incentive through differential pricing, marketing, and promotion practices.

This one can be handled in two different ways if the LCBO was privatized.

The first way is the Ontario government could mandate that a certain percentage of stock/floor space is dedicated to domestic wines in privatized stores. Similar to the way Canadian content rules are used for radio and TV airtime. Bookstores in Canada are subject to this as well.

The other way to deal with this is to stop protecting Canadian based wines altogether. We are living in a global economy and regional protectionism is very outdated thinking. This protectionism hurts the Canadian wine industry by giving them a closed market for sub par wines, and Ontario consumers by charging higher prices for imported wines to prop up the domestic market.

Ontario makes great Riesling, Late Harvest, Ice wines and some decent Chardonnay but that is it. Ontario wines are also generally overpriced, can't count the number of times I have an Ontario based wines that is good, but then see the price and think, "It was good, but not that good.." and know I can find a much better imported wine for the same price or less.

Here is a link that shows a list of wine producing countries by volume.

http://en.wikipedia.org/wiki/List_of_wine_producing_countries

Canada is 32nd in the world. I tossed around the numbers and came up with a few interesting observations - Canada produces less than 1/6th of a percent of the world's wine. Canada's total wine production is 4% of South Africa's production, Canada total wine production is less than 1% of France's total wine production.

Now with those observations, wander into your local LCBO and look at their wine sections. The South African wine section is super tiny (if it exists at all); France's wine section will be at maximum the same size as the Canadian or less. The Canadian wines usually take up 20-25% of the wine floor space of an LCBO. So Canada makes less than 1/6th of a percent of the world's wines and yet gets 20-25% of the floor space at the LCBO which is ONLY place to purchase imported wines. This isn't including the bonus of being the only wines sold in Ontario Supermarkets.

What is their motivation to make better and more competitively priced wines with these types of market bonuses???

What is really scary is most Canadian wines were over-priced when our dollar was at 63 cents vs. US dollar... now that our dollar is at par with the US; Canadian wines should be stupidly overpriced. Well, they would be if the LCBO was actually quick to pass on those savings on California wines to Ontario consumers. To be fair the LCBO has passed on some savings - a bottle of wine in the US which retails for $7.99 US, was listed at $19.95 is now listed at $17.95. Wow, a $20 wine when the dollar is at 63 cents in now is $18 when our money is at par!

STOP protecting Canadian wine... if Ontario can't make wines which are competitive on the world stage then they need to get the fuck out of the wine business.... PLEASE.

Now people reading this make think I'm being very "Un-Canadian" in my thinking, and thinking that if I love the US so much then I should just move there.

My response to that is this... I'm a confident and proud Canadian. I have no doubt in my mind that our Rieslings and Dessert wines can easily compete on the world stage. Stop planting vines in Niagara that don't grow well (Cabernet Sauvignon for example) and focus on making the best damn Rieslings and dessert wines on the planet. The only way this is going to happen is if we stop protecting them...

Cheers!


Mark.