A new white paper from Deloitte has revealed that the Canadian wine industry contributes $10.1bn to the country’s GDP.
Within this, it is estimated that $3.2bn is added directly by the national wine industry. Meanwhile, $6.9bn comes from interconnected industries such as transportation, travel, hospitality and entertainment across the country’s four major wine-producing regions.
At the same time, the research, commissioned by Wine Growers Canada, found that the industry supports nearly 100,000 jobs annually.
The report said that most of the wine industry centres around four major regions: the Okanagan Valley in British Columbia, Niagara in Ontario, Cantons-de-l’Est in Quebec and the Annapolis Valley in Nova Scotia. However, it noted that other regions are also emerging.
Tax
Despite this growth, high levels of taxation continue to burden the expanding industry, with an average total tax contribution of 15.3% on a $19.88 bottle of wine.
In Ontario, the federal and provincial tax on a $19.88 bottle of wine totals 14.2%, while in British Columbia this rises to 15.7%.
The report suggested that higher taxes translate into higher prices for consumers, which could potentially weaken demand and dampen further growth.
Domestic market
Considering sales, the report found that Canadian wine is still sold predominantly on the domestic market rather than exported.
At home, Canadian wines account for 40% of domestic wine sales by volume and 30% by value. According to the findings, this is largely positive as it helps mitigate the risks associated with trade disruptions.
Over the next 15 years, Wine Growers Canada aims to increase domestic market share to 51%, which could add up to $10.6bn to the economy by year 20.
Exports
While the report did not specifically address growing export markets, Canada is also seeking to widen its reach internationally.
Earlier this week at the Taste Canada event in London, Janet Dorozynski, Canadian alcoholic beverages sector lead at the Trade Commissioner Service, said that the country is increasingly targeting UK consumers.
Other key export markets include China, the Netherlands and Japan. Previously, the United States was also a major market, though it currently remains unstable.
Speaking about the British on-trade, Isa Bal, sommelier and co-owner of Trivet, said that consumers are becoming more interested in Canadian wines as they distance themselves from the United States.
“We are seeing a shift from US wines to Canadian wines, particularly away from Californian wines, which had previously been popular,” he said.
Likewise, more producers are aiming to enter the UK off-trade, though exact export figures remain unclear.
