Evidence of meeting #76 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 spirits.
A recording is available from Parliament.
NDP
Rathika Sitsabaiesan NDP Scarborough—Rouge River, ON
It would give you some sort of leg up over the large international brands that are mostly non-Canadian.
NDP
Rathika Sitsabaiesan NDP Scarborough—Rouge River, ON
I also want to commend you in taking that risk as an entrepreneur, trying to revive an older brand that is a Canadian icon from years past, and making that effort to ensure that you're being responsible, that you're making that effort for corporate social responsibility and ensuring that you're taking Canadians' health concerns and health risks into account, trying to minimize health risks as much as possible for the consumption of your product.
Other than this mid-level designation that you're looking for, what else can the federal government do to assist other Canadian manufacturers and producers within the soft drink industry to be able to compete better with the larger international brands, the large multinational corporations?
Chief Executive Officer, The Pop Shoppe
It always boils down to the cost of manufacturing and that's where we run up against an issue. Our costs to produce goods are substantially higher because we're producing on a smaller level than some of these multinational brands are.
NDP
Chief Executive Officer, The Pop Shoppe
Exactly, so we're already behind in that. When it moves to the raw materials procurement side of things, we're paying more for cane sugar and for beet as well, for whatever reason, if it's a lack of demand—
Chief Executive Officer, The Pop Shoppe
Exactly.
So if there were some sort of program that would assist in putting us on a level playing ground, then we would be able to flourish a bit more than we are right now.
Currently we produce all our product here in Ontario and we ship to all other provinces as well as shipping into the U.S. from our Ontario facility. So we run into a great deal of difficulty just for the simple costs of transport. We don't have the ability or the volume to have smaller satellite bottling operations throughout the province or throughout the country for that matter. So we produce everything in Ontario.
So any cost savings we can find on the raw materials side of things would certainly pay much greater dividends in being able to get our product out there and help us with the distribution of our brand.
Conservative
Randy Hoback Conservative Prince Albert, SK
Thank you, Chair.
Mr. Mulligan, when I saw you, I flashed back to the 1980s and the show called Good Rockin' Tonight. It's nice to see you. I've moved on to some other noble ventures too.
When you talk about your scenario, I give you credit for what you're doing because it's very similar to what a lot of wheat farmers faced in western Canada for many years, having a government bureaucracy controlling their future and dominating how they marketed their product, which is very similar to the liquor boards, even though they are province by province. So I give you credit.
Also to your comment about how you took a case to the border, we had farmers take a sack of wheat across the line and they got sentenced, went to jail, and sat in cells right next to drug dealers. It's pretty amazing that people grow something legal and end up in jail with drug dealers. It tells me there's definitely a problem here, and it needs to be addressed. I'm just not sure....
I think it's fair to say that the provinces are addicted to the revenues from alcohol, and until you can figure out how to break that provincial addiction, we're always going to have a problem here. I often wonder why we can't go to the grocery store and get our cheese and our bottle of wine and be done, as one can do in the United States or other countries around the world. But here in Canada, of course we can't do that.
You say you talked to a lot of producers off the record. I wonder how a new producer goes about bringing wine to market. How do they go about dealing with the liquor board stores? What's the process of acquiring that shelf space? What are some of the stories they tell you with regard to this?
As an Individual
You've nailed something very succinctly, which is that they go hat in hand. They are absolutely at the disposal of the liquor control boards, and they must have these boards' approval; otherwise they're not in business. It's a delicate imbalance that has to be corrected, because there has to be an alternative.
Also, more importantly, the liquor control boards have to be accountable. That's where you come in. You have to hold their feet to the fire. They have been bullying this industry for so long, they think they can't be touched. Well, they can be touched, and it's going to happen in a number of ways. What's going to happen down the road—and it's just a guess on my part—is that there will be a social movement that will find wine being moved via Internet sales. I'm now hearing it more and more. About three or four years ago, I asked if they were shipping wines, and they all said no. Now what I'm hearing is that they are shipping wines and will continue to ship them, and they dare the liquor boards to charge them.
It's right around the corner, a social movement is coming. We can talk until we're blue in the face. I think the industry itself is going to move this, if we can't.
The small wineries right now go hat in hand and ask to have one of their wines on the liquor board shelves because it'll help them a lot. If the liquor boards say no, the small wineries are buggered.
Conservative
Randy Hoback Conservative Prince Albert, SK
Let me put it in perspective here again, then. So, you buy a winery to become a small vineyard and invest x amount of dollars. I would think it would be a couple of million dollars probably before you're producing wine, and yet you still don't know whether or not you will or won't have a marketplace in Canada. Is that fair to say?
As an Individual
Exactly. What you can do is hope that people will notice that you're there, that they will come through the front door and you can do over-the-counter sales, but that's very tenuous. You still need the Albertans to come in and, God bless them, buy their two cases and take them back home for the winter. There's wonderful commerce between Alberta and British Columbia, both ways. Frankly, that's no way to make a living. If you're going to be a winery, you should be able to put up a website and say, “This is what we make and we're very proud of it.”
Actually, some of the best wines, period, are the ones you can't get your hands on, and most of the people who listen to my show or just follow wine, in general, are looking for those small wineries that other people haven't heard of. They love the chase for the small wineries. We need to support them.
Conservative
Randy Hoback Conservative Prince Albert, SK
If the liquor board says, “You didn't wear your tie right today, so we don't like you”, what is the appeal process for the liquor board store?
Conservative
Randy Hoback Conservative Prince Albert, SK
So that's it. That's end game, match, done: you're out of business.
Conservative
As an Individual
It's a scary thought when you think about it, but that is the process.
For example, I was the chair for the Canadian Culinary Championships in Kelowna two years ago and I interviewed the chef representing the Maritimes, who was from St. John's, before he came. I asked him whether he would be pouring a Nova Scotia wine. He said, “I've been turned down. I cannot use maritime wines”. I said, “Wait a minute, you're from St. John's. Why wouldn't you use maritime wines?” He was told he could not ship wines from Nova Scotia to St. John's, and he had to use Ontario wines. It's not that that's a bad thing, but he wanted to represent where he came from and he couldn't do it. You wouldn't believe the frustration in and around that decision.
Conservative
Randy Hoback Conservative Prince Albert, SK
So if I wanted to promote my B.C. vineyard in Ontario, I couldn't even take my own samples to Ontario to promote my own vineyard from back in B.C.?
Conservative
Liberal
Frank Valeriote Liberal Guelph, ON
Thank you, Mr. Alger and Mr. Mulligan, for coming before the committee.
Mr. Alger, first of all, you were talking about the health of the soft drink and the additives. I'm wondering to what extent you are possibly looking at even healthier content, like Stevia or other sweeteners. I know there was a movement to aspartame some time ago. I'll be candid that I drink a lot of diet pop and I'm constantly being warned about my consumption of aspartame. I'm really not quite sure of the consequences of that. What effort is being made to introduce even healthier sweeteners, number one?
Number two, I know efforts have been made with respect to the tin cans, to make the aluminum cans much thinner and to recover pop bottles and make them recyclable. What other efforts are on the horizon to make it more environmentally sustainable?
I'll ask those two questions of you.
Chief Executive Officer, The Pop Shoppe
I'll address the first one first.
As a small producer, it's difficult for us to put a lot of R and D money into creating different flavour profiles and to work with the new sweeteners that are coming on the market. You're exactly right that there are a lot of sweeteners coming into the market, like Stevia, which are interesting to somebody like me, to see if there's a way to be able to formulate that and work it into our beverages. The difficulty again is that it just comes down to lack of funds to be able to put that money back into R and D. I pretty much have a sit-on-the-sideline mentality and let the bigger producers work out all the kinks, and then it makes it a little bit easier for us to go in and match some of the processes they're doing to do that.
We've done some things with aspartame and we've done some blends. Ultimately, the flavour profile just isn't there, so that's where a lot more money needs to be spent on the R and D side of things to be able to see whether or not there is way to use a different type of sweetener, to get that flavour profile the consumers are looking for.
Right now there are a lot of organic sodas on the market and, in my personal opinion, the taste is just not there, not to the point where you'll get a massive amount of consumers to switch over from what they're typically used to drinking. I think more money needs to be spent on trying to develop that side of the business as well. Certainly, if I had the means to do that, I would, because it's to the benefit of our company.
On the recycling side of things, I'm happy to say that we produce all of our product in glass bottles, which are environmentally more friendly than cans and, certainly, plastic. We do everything we can possibly do on that side of the business to try to promote why glass is better for the environment. It's simply that the soda will taste better. There are a lot of attributes, but certainly the environmental one is a big issue. That's why we produce this in glass, and I'm happy about that.
Liberal
Frank Valeriote Liberal Guelph, ON
Thank you very much.
Mr. Mulligan, you talked about access to shelf space. This committee heard from producers and processors some time ago that, in some instances, to get shelf space with grocers they had to pay money to get to that space. I'm wondering if in your travels and your interviews you have heard of any vineyards having to pay money to any of these organizations to get any shelf space.
