Lenko's reputation precedes him. And don't get me wrong here. He's a nice guy, a ruggedly handsome man chiseled from years working his dad's orchards and vineyards, and he's passionate about wine, Niagara wine, and where it's headed if changes aren't made quickly.

For the most part Lenko's a one-man band. Chief winemaker, grape grower, tractor driver, mechanic, salesman, bottler, chief bottle washer, accountant, and, on top of all that, a philosopher about the gathering storm that's casting a pall over the Niagara wine industry. So, he's busy. Very, very busy.

And he doesn't need help selling his wines that enjoy a cult-like status with aficionados and his 20,000-strong mailing list. The sign at the end of his non-descript driveway reads: Daniel Lenko SOLD OUT! Tasting room closed until Feb. 1.

It's the end of July and while most Niagara wineries are counting on tourist traffic well into the fall to make ends meet, Lenko has shut down and turned his attention to the harvest and the self-sufficient operation he runs so completely that if the world fell apart around him tomorrow, Lenko could quite happily go on making wine forever.

Lenko is a character and not unlike a lot of small, boutique winemakers trying to carve a living from the vineyards that grow so vigorously in the Niagara Peninsula. These are, for the most part, hard working, salt of the earth folks. Lenko bought the vineyards from his dad, Bill, an orchard farmer and grape grower, and decided not only to continue to grow the grapes but also make wine from his own estate vineyards. He benefited from some of the oldest Chardonnay vines in Niagara and his wines quickly made their mark in Ontario, earning award after award and gaining a strong base of consumers that beat a path to his door to buy cases of his wine when they are released. He only makes 3,000 to 5,000 cases a year, most of it in the super-premium category. And he does it with only one other employee not including his father, Bill, 83, who helps with tastings from the kitchen table of his house.

Lenko is not happy with the Niagara wine industry that he says is in dire need of change. And he saves his harshest criticism for the Liquor Control Board of Ontario. "I don't mind the LCBO," says Lenko. It's the 'C' part I don't like." Lenko calls it a travesty that the only outlet for his wine, beyond his kitchen tasting room, is through the government liquor store. "Where do I live? Cuba? It's the responsibility of the government to collect taxes. Not run businesses," he says.

Lenko touches on a topic that enrages many in the Ontario wine industry. Ontario lives under one of the most antiquated liquor control systems in the free world. With only one market for selling their wines at the retail level beyond their own wine shops, the small, boutique winemaker is at the mercy of government bureaucrats who historically have wanted enough quantity to serve stores throughout the province. It’s the kind of quantity that small winemakers don't have and never will have under the current system.

Then there are the 250 or so "grandfathered" private retail store licences that are in the hands of a few giant wine producers such as Vincor Canada and Andrew Peller Ltd. Those big companies can sell their products through kiosks and private stores, primarily the Wine Rack and Vineyards Estate Wines stores while shutting out any competition. These companies have licences that predate free trade rules and allow them an outlet for their VQA wines and also the contentious "cellared in Canada" wines that only require, by law, a minimum of 30% Canadian grapes blended into a maximum of 70% of grapes from foreign countries.

Which brings up an entirely different impediment for the small winemaker, says Donna Lailey, whose gorgeous Niagara-on-the-Lake winery, Lailey Vineyard, produces between 8,000 and 10,000 cases of mostly estate-grown wines.

"I'm really worried about the whole blending scenario," she says. "If we're going survive we have to have quality wines."

Lailey says that consumers are confused about "cellared in Canada" wines and feels the LCBO has not done a good job educating them about the differences between 100% VQA wines and those blended with foreign juice. The two categories are located close together in most LCBO stores, though recently clearly separated, and many consumers are not aware that a blended wine with a popular, non-VQA Ontario label can contain up to 70% foreign wine.

"Why are the blended wines not in the Chile section," she asks. "If labeling and signage (at LCBO stores) were correct, you can let the consumer decide our destiny." It's a tough pill to swallow for small Niagara wine producers. But the fact is, the big blenders make a lot of money and employ a lot of Niagara workers in the process. And the large companies return much of the profits back into their VQA labels such as Jackson-Triggs, Inniskillin, Hillebrand, Peller Estates and Thirty Bench. Two companies — Peller and Vincor — crush over half the grapes grown in Ontario and together account for well over 50% of total wine sales in the province, according to Duncan Gibson, director of finance for the Ontario Wine council.

Also consider the non-VQA effect on the balance books. In 2007-2008, Ontario wine sales, including blended wines, amounted to $506 million. VQA sales were $160 million. And, according to the Wine Council, the blended wine category continues to grow at a rate of 4% or better every year while VQA sales are flat.

Lenko is a firm believer that the entire region's wine quality has to improve before the industry can move forward. The first step towards that, he says, is to dismantle the grape growers marketing board that sets the price per tonne of grapes based on sugar content. The higher the sugar content, the more money that's paid per tonne. But, Lenko argues, the outdated system, in place and untouched by government regulators for 65 years, makes it more profitable for grape growers to sell bulk grapes at a lower sugar content which amounts to poorer quality wines.

"It's critical mass," says Lenko. "If everyone makes better wine, more people will make the drive from Toronto to buy our wines. People have to be willing to make the drive."

In most wine regions of the world, prices for grapes are decided on between winemaker and grower, a mutual agreement that is consumer driven — the better the grapes, the better the wine, the more consumers will pay.

All of these issues weigh heavily on the minds of the Ontario Wine Council, a non-profit trade association that represents the interests of 84 Ontario wineries and whose members represent 99% of Ontario wine sales. Chair of the association, Norm Beal, also owner of Peninsula Ridge Estates, a stunning Beamsville winery that makes outstanding VQA-only wines, understands the concerns of some wine producers out there and he shares their pain.

It's been a perfect storm since Beal left his successful oil trader job eight years ago and decided to become a winery owner in Niagara. Beal lists off the disasters that have plagued Niagara wineries: The lady bug scandal (wines tainted by a bug infestation), 911 terrorist attacks (U.S. tourists stopped coming to Niagara), SARS epidemic shortly after, then grape shortages in 2003 and 2004 and the disaster of 2005 when a bitter January freeze killed off vines and reduced grape production by two-thirds, forcing the government to change blending rules for one harvest to allow 99% foreign grape content. It also left many small wineries with little or no wine to sell. It's been one thing after another, says Beal.

Then there's the big white elephant in Niagara. "We have our problems in Ontario with distribution," says Beal. "There's only one retail store — the LCBO. We're still living in the dark ages in this province." Beal says that Niagara will likely not suffer from a shortage of grapes again because of recent investments in technology, namely substantial spending in wind machines that help vines from freezing, but without distribution beyond the winery shop and a few restaurants there isn't much room to grow.

"The impediment to growth is access to markets," he says. It's not a new issue for the wine council but convincing government to change the rules and relinquish its stranglehold on the retail wine market will have to make "economic sense" before anything will get done. "We're not going to embarrass the government into anything," Beal says.

The wine council is working on a plan with the government, in particular MPP Jim Bradley, who acts as wine ambassador for the Liberal government, to get some sort of private retail network in place that is in compliance with trade regulations and that will promote and sell VQA wines. Beal says that some form of retail outlet, outside of the LCBO, would provide a solution for small producers to get sales and exposure that's just not there for them under the current conditions.

The Ontario government has said it is willing to listen to ideas from the industry on how to raise the profile of VQA Ontario wines and has not closed the door on some private stores. It's a system that has been in place in B.C. for a number of years and has been met with resounding success. Beal says the wine council has made in-roads at the LCBO and has found more exposure for smaller brands through different promotions recently and he senses changes for the better at the government monopoly. After that, it's up to consumers.

"We're a young region and we're going to grow. We have to convince the young consumer to go to the VQA section at the LCBO. And we need the consumer to come down (to Niagara) and check us out," Beal says. Wine in Niagara is at a crossroads. The government's monopoly is seen as a barrier to growth but it seems willing to change, or at least discuss avenues that can help the small producer, and the industry in general, to grow and compete on the world wine stage. For many in Niagara, those changes can’t come soon enough.

Articles by Rick Van Sickle www.littlefatwino.com