Good afternoon and thank you for this opportunity to state the B.C. wine industry's case before this committee.
The B.C. Wine Institute is an organization of voluntary members that represents 95% of all wine production in the province and is wholly supported through member sales. The BCWI represents the interests of B.C. VQA—that is 100% B.C.-produced wine—in the marketing, communication, and advocacy of their products to all stakeholders.
Specifically, the B.C. wine industry has enjoyed tremendous growth provincially over the past five years, with over $4 million of average growth annually, and almost 9% over the last five years. With approximately 10,000 acres of grapes planted in B.C., the B.C. wine industry is small. Compared to 15,000 acres here in Ontario and 40,000 in Napa, for instance, we are a cottage industry. This bill goes a long way in helping us to grow our markets. Of the total of 210 grape wineries currently licensed in the province—an additional 24 growers have indicated they will start a winery in the future—approximately 80% produce less than 10,000 cases, and the majority of those are family-owned agribusinesses making fewer than 5,000 cases a year.
As of January of this year, of the total provincial B.C. VQA wine sales, 25% were sold through the B.C. LDB and 24% were sold directly from wineries, with the remainder sold through private liquor stores, restaurants, and the rest.
While it is difficult to estimate how many direct winery sales are done through wine clubs, in-province direct delivery, etc., the majority of B.C. wineries offer such services, and it is an effective and efficient marketing and distribution strategy, specifically for the small operators. It is reasonable to assume that a minority of wineries may currently be illegally shipping wine directly to customers, but the majority do not and are at a distinct disadvantage to those who may be.
B.C. wine tourism has been experiencing tremendous growth over the last number of years, specifically since the 2010 Olympics. We've seen a tremendous number of wineries making significant capital investment in accommodation, restaurants, and the rest to augment the wine tourism industry in B.C.
Provincially, wine tourism was estimated to be worth $75 million in B.C., according to a study done in 2003. While all agree that it's substantially more than that, the number is pegged at $75 million. It is a significant attribute of B.C. tourism.
As you are aware, the Importation of Intoxicating Liquors Act provides no legal exemption in federal law to transport wine across provincial borders, even for small quantities purchased for personal use. The IILA makes it illegal for Canadian wine consumers to take wine that is not purchased in or consigned to the province across a provincial border. It also prohibits a consumer from directly ordering out of province after returning from a B.C. wine tour.
Since June 2011, several liquor boards have allowed a quantity “on your own person” into the province. While this is an improvement, it is only of benefit to residents of border communities, and provides limited benefit to wine consumers or tourists who may have travelled, say, from Nova Scotia to British Columbia to visit wine country once every couple of years.
We see Bill C-311 as having a tremendous impact on the wine business of B.C. The number of wineries in B.C. has grown by 281% in the last ten years. Today, many of those are small family-based wineries focused on small-lot wine. The investment made in the B.C. wine industry has been in response to a growing interest in B.C. wine and tourism.