Evidence of meeting #72 for Agriculture and Agri-Food in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
Conservative
Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON
Right. When that law passed, some provinces reacted negatively and threw up other barriers. Did your organization respond to that? What are the barriers in Ontario right now? I'm not exactly current on what they are.
Can a tourist come to Ontario, pick up a case of wine, and drive or fly back to his home with a case of wine under his arm?
Director, Winery and Grower Alliance of Ontario
As a producer of outgoing wines, Ontario's completely silent, funnily enough, because they attract the taxes either at the cellar door or at the retail store, so they are still getting all of the taxes from provincial and federal standpoints.
Depending on which province is getting the incoming wine, there are some issues. For us in Ontario today probably the largest barrier is the province of Quebec. There is so much that takes place on this bridge anyway, whether it's domestically produced or from a foreign supply, that again it's not a barrier. It's potentially an inconvenience, but at that point it's nothing more than that.
Conservative
Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON
Let me ask you another question about the LCBO. Certainly in the past number of years, the LCBO has really taken on the beer market by expanding their beer selection. It's heavily advertised in nice glossy magazines that come in the summer on a hot day showing ice cold beer. There have coolers full of beer.
I know that overall, nationally beer sales have dropped, but when you go into a locale like an LCBO, as a seller of Ontario wine have you found that wine sales have dropped as a result of beer being sold by the LCBO? In other words did your association find it disadvantageous for beer to be sold because the consumer says, “I'm not going to buy two bottles of wine. I'm going to buy a bottle of wine and some beer”?
Director, Winery and Grower Alliance of Ontario
Colour me a bit biased. The LCBO today sees itself as the retailer of choice for beverage alcohol. Unfortunately there's a pretty big competitor in Ontario called The Beer Store. It happens to be 96% foreign-owned, and it controls the sale of beer from both the on-premise standpoint and the retail standpoint.
The LCBO saw an opportunity, and over time it has really evolved that opportunity, and it has dedicated an increasing number of linear feet of shelving and warehousing space and purchasing dollars for beer.
Candidly speaking, they prefer to sell beer because the markup structure in the LCBO is a little bit higher. They make more money per unit of beer sold just because the markup is higher than it would be on a bottle of wine. Frankly they make more money when they sell spirit, because the markup structure is higher on spirit. This is the Ontario model.
They have made a definitive choice to expand their beer offerings, in order to drive traffic to their stores and frankly away from another retailer, and that's their choice.
Conservative
Conservative
The Chair Conservative Merv Tweed
I have to stop there. I'm sorry. We're way over time on that. They were good questions.
Ms. Brosseau.
NDP
Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC
Thank you, Chair.
I'd like to thank our witnesses for being with us today.
Mr. Goetz, I have a few questions. I was going through your website and I read a press release saying there was information from Statistics Canada that between 1999 and 2011 there was a decrease in soft drinks.
Why do you think that was? Why do you think people are consuming less? Is it because of education, or is it because of some kind of trend?
President, Canadian Beverage Association
It's the variety of products that are on the market now. I always use the example that when you used to walk down the beverage aisle in your average grocery store, it was blue on one side and red on the other. That was really it.
There are a lot of products on the market now from sports drinks to bottled water to flavoured bottled water. There is a much wider variety of products available to consumers, and so their beverage choice has evolved over years.
People are drinking as much. Again back to Mr. Valeriote's point, everyone has to consume a certain amount of liquid per day in order to stay hydrated, whether that is water from a tap or something else. There's just a far greater variety of products on the market now.
NDP
Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC
So the soft drink manufacturers are branching out into bottled water and fruit juices and that kind of thing.
NDP
Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC
I was wondering if you could talk a little bit about fortified drinks. I was grocery shopping not too long ago and I ended up buying orange juice. When I got home and tasted it, it tasted kind of weird. It was fortified with fish oil.
That's something; we're fortifying a lot of our juices. Is that a trend we have in Canada? I think it has been accepted since 1996 that we're fortifying more and more of our juices. Is that something to be expected as a growing trend in Canada?
President, Canadian Beverage Association
Yes. I'm unfamiliar with the example you mentioned, but absolutely, and it's not just the beverage sector. It's across food and beverages. Absolutely, it is. Fortification of various food and beverage products has been a growing trend in Europe and the United States as well as in Canada.
As food and beverage manufacturers, both large and small, try to meet the demands of consumers, you're going to see that, and it is one area where the food and beverage industry works closely with Health Canada to ensure that all ingredients used in fortification are approved. Then it's up to the consumers to decide which products they wish to purchase.
NDP
Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC
Obviously it's approved by Health Canada, so I guess it's not an issue. You've brought to our attention the problem of red tape and making it easier to get things to the market. I take it this issue of new fortified elements in drinks is not a problem to date?
President, Canadian Beverage Association
Yes, going back to stevia, that was a problem. It took far too long. Every other jurisdiction that I'm aware of had approved stevia for use as a sweetener years before Canada was able to get through the approval process. Again, it's a matter of government working with other governments as well as with the industry to try to cross the t's and dot the i's when it comes to safety and health. But when other large jurisdictions have already acted with approvals, I think there is a way that the Government of Canada can then look at that, use some of that analysis, and speed up the process to give consumers more choice.
NDP
Ruth Ellen Brosseau NDP Berthier—Maskinongé, QC
There is a lot of awareness and education about childhood obesity and how we should be eating better and healthier. You think the government obviously has a role to play in combatting obesity, more than just taxing soft drinks. You think it's more of an education, an awareness, like a national food plan for Canada, a national food strategy idea. Is that right?
President, Canadian Beverage Association
Absolutely, and thank you for that question.
There are advocates out there, again, as I mentioned, who would like to hang the obesity issue on the hook of one industry, who say if we were only to eliminate certain products from our diets or tax them, that would be the magic bullet to help us curb obesity.
There are very few experts out there who agree with that perspective. Obesity is a complex issue. If you lead a balanced, healthy lifestyle and you're following the Canada food guide, there is nothing wrong with enjoying a full-calorie beverage at the end of the day. Eliminating that from a diet is not going to cure the obesity issue in Canada.
I think government does have a role to play in educating Canadians about balanced diet. The government has a particular role to play in educating Canadians about being active and moving more. A full-calorie beverage, for example, has anywhere between 100 and 160 calories. There are gender differences but in general Canadians should consume approximately 2,000 calories a day. You can make beverages of your choice fit. Where we take issue at points in time is when governments take aim at one particular industry or one particular line of products as the unique cause of obesity, when experts agree that approach just does not work.
Conservative
LaVar Payne Conservative Medicine Hat, AB
Thank you, Chair. My questions are through you to the witnesses—and thank you for coming today.
I have a couple of questions for Mr. Goetz. First of all, you talked about stevia. One of the issues with it is the stability. Is there some issue in terms of shelf life with it? Could you clarify that for me?
President, Canadian Beverage Association
As far as sweetener is concerned, certain additives and certain ingredients, be they sweeteners or other things, don't mix as well, quite frankly, in a food or beverage product. Stevia is one of those. There are products that stevia can be used in. There are others that it is not as productive to use in. When you take a glass of water, you put sugar in it, you stir it, it dissolves and it stays dissolved.
There are some issues around stevia as far as its ability to be used in some products, but our members have worked very hard in other jurisdictions for years to find those products in which it does work.
Conservative
LaVar Payne Conservative Medicine Hat, AB
The other comment I wondered about is that in terms of packaging, we quite often hear about different cities/provinces wanting to ban certain packaging products, plastics or whatever. I'm just wondering if that's had an impact on your businesses.
President, Canadian Beverage Association
Thank you for bringing that up. I think Mr. Valeriote raised this as well in his question; I don't think I got to the answer.
There have been municipal initiatives popping up around the country about banning certain packaging, and I'd like to address that head-on. Usually it surrounds the use of PET plastic. The fact is that PET plastic is the most-used consumer goods packaging in the world for a reason. First of all, it is extremely recyclable. It can be recycled up to 20 times into PET again, without losing almost any of its actual energy or breaking down. There is not really a more recyclable type of package on the market, which is why you see not only the beverage industry using it, but also other products—salad dressings, etc.—moving to it.
I should point out on the recycling matter that PET plastic is recycled across Canada on an average of about 70%. It varies province to province, with different recycling, but it's approximately 70%. I would point out that the European Union recycling rate for PET is 48%. So Canada is a leader in that.