Problems with VQA
In my career at the LCBO, during the mid-80's, I was designing sale section procedures, pioneering promotions centering around reduced prices, signage at the bin, inventory methods and other items I was chosen to be the District Merchandiser. Before this position melted into non-existence, I was working on some items, unofficially, with now-Senior VP Bob Downey. I clearly remember Bob challenging me to find a way to "Sell expensive Ontario wines". I had been doing quite a bit to sell "Temporarily Reduced Ontario Wines" but this was a challenge.
After being transferred to the slower LCBO in Lakefield, a few minutes north of Peterborough, I came up with the concept of trying to put the then-new VQA (Vintner's Quality Alliance) wines into one section of the store by themselves. This soon developed into a major promotional effort, and I have been told by people working in the Chairman's office that both the VQA sections across the whole LCBO and the icewine releases arose from the sales experienced in that store from late '89 to 1993 or so, at which time LCBO shut down most of what was happening at that store (to protect the importers, as it was told to me in a rather embarrased fashion). [Also, when VQA started, it was very much the little guys trying to carve out a tiny niche in the market. It has succeeded, and has been taken over by "factory" wineries.]
At this time the then-small wineries in Niagara referred to me, semi-jokingly, as the "Patron Saint of VQA". I still have great faith in what VQA has done and can continue to do into the future. I am not anti-VQA. I don't want to expand it to include unproven things, or to include non-grape wines. Yet I have the following problems with the current system:
1) It is provincial law, but is run by a Private Producer's Club, a Members-only affair. While others can join, fees are high and many types of wine, including all fruit wines and many made from grapes are automatically disqualified.
This has evolved, to some extent, into a Good Old Boy's club which now seems to focus on keeping the "unclean" out of the dining room, as it were. It is my belief that this should be changed in two ways:
i) The Province (better yet Canada!) should take control of the VQA legislation away from the producer's group. As a cynic I presume that something is liable to go wrong when I see a self-policing business group.
ii) There should be a second level of wine, not called VQA or even having the same letters, which would guarantee that the product was simply 100% Canadian, be it rhubarb, grape or apple. This would be a parallel to wine laws in other countries, notably France where AOC wines are the top, Vin du Pays a lower level, both 100% French. If this doesn't go past the level of Provincial control, I would like to see the same minister who is responsible for LCBO be responsible for Ontario wines. That minister would be rated on the combined work of the two now-competing groups.
2) There are serious problems with government "grants" to the wine industry. The latest $10 million giveaway is only being made to those wineries who sell VQA through the LCBO. This is, to me, a scam of the first order. VQA wines sold through LCBO are paid for by LCBO as any other wine. The Ontario government, outside LCBO, is rebating the difference on a certain quantity of VQA for each lucky participant which will about equal the amount they lost by selling at LCBO. In other words LCBO takes in more money and the government hands it back. LCBO even gets to brag about more profits! But in no way has $10 million been added to the picture... the previous $5 million grant was divided with $1 million to the Grape Growers, $1 million to the Wine Council of Ontario, and the other $3 million apparently divided in a fashion which seemed to reward those who had sold quantities of VQA wine through the LCBO. LCBO or sales therein should have nothing to do with aid to the wine industry, whose biggest competitor is LCBO. Nor should government aid go only to members of the club known as VQA. All Ontario wineries making wine from Ontario fruit should be treated equally. Anything else is simply not fair.
3) VQA has had the following words - among others - reserved to usage in their hands. To many in the wine industry this is absolutely ridiculous, as it prevents anyone who isn't a member of the club from using them, and most are very common terms in the English language:
- Ontario (you cannot say that your wine uses Ontario Strawberries, for example).
4) unfair taxation. When a winery sells any wine at their establishment they keep about 2/3 of the retail price. If they sell a wine through LCBO, or to a hotel or restaurant, they get about 1/3. If they sell a VQA wine to a hotel or restaurant, they are treated essentially as if they had sold it at their own store. The situation exists where 100% Ontario content wines are being sold to restaurants at a huge tax disadvantage, and wines (2005 vintage) with up to 99% imported content selling at the winery stores, sometimes throughout the province in many locations, are getting the tax break. This is simply wrong.
There is no argument that should allow one 100% Ontario wine to have huge taxation advantages over another 100% Ontario wine that I will accept. And I would favour treating all sales of wine containing imported quantity, no matter where sold, at a percentage tax disadvantage, payable to the Treasurer of Ontario (not LCBO) based on the % of imported content. There is little incentive for a wine factory in Ontario to actually purchase Ontario grown grapes when they can sell stuff that is largely cheap (I've been offered bulk Argentine wine at 20 cents per litre) imported wine as "Cellared in Canada" and get the full tax advantages from the Ontario taxpayer. VQA wines alone should not get an advantage, but an advantage based on % domestic would get my vote.
5) Membership fees are exorbitant to a small producer. $1,000.00 per annum plus GST, plus 4 cents per bottle, and other fees apply. This is really a method of keeping out the little guy. Or to scare off the person starting a winery in a marginal area who can only grow one or two approved hybrids (often with poor quality results). The annual fee is the same whether you make 1 litre or 1,000,000 litres. Something wrong there.
6) There has been a push for "VQA stores" in Ontario. While I hope this comes about, and is completely outside LCBO control, this should be "100% Canadian stores" (not even 100% Ontario). Yet I fear that the highly influential private club called VQA will continue to have government sanctioned unethical advantages over those other 100% Ontario content wineries that can't get to the table...
Many of these problems could be solved by the adoption of Wine legislation such as has been recently announced in British Columbia, and is online at this location. This would not of course solve all problems, but it would be a good first step to see what the somewhat-more-progressive and supportive government of British Columbia has done to support their local wine industry...
Larry Paterson
- Estate Bottled (a standard international term to denote a wine grown and bottled at the same place)
- Vineyard (can a non-member say "field where grapes grow? probably not...)
- Icewine (or anything near it)
- many geographic designations. If you live in Prince Edward County, for example, you can't put it on your label unless you are one of the club.
- The maximum fine for violating this is $100,000.00. You'd get off easier in Ontario committing murder in some cases. This situation is ethically wrong.
August 2, 2007