AAWE, Economics Dept, New York University, 19 W 4th St, 6Fl., New York NY 10012aawe@wine-economics.org

AAWE Working Paper No. 222 – Business

Post 107 of 334
AAWE Working Paper No. 222 – Business

Concentrated or Competitive? An Overview of the Wine Industry in British Columbia, 2011-2015

Katarzyna Pankowska

Introduction

The fact that Canada domestically grows Vitis vinifera and produces various types of table wines may still come to some as a surprise, yet it is true. The geographic location and common association of Canada with a cold climate, the relatively small size of the Canadian wine industry (especially in comparison to wine giants like France or the United States (US), for example) are the main reasons why the industry still lacks international exposure. Because of that, to the average wine consumer in the world, Canada still is not known as being able to grow vinifera and supply domestically made table wines. If anybody in the world happens to know that Canada produces wines, it is usually because of ice wines. Canadian ice wines remain the most frequently recognized in the world as being Canadian-made and associated with Canada (Canadian Vintners Association Website statistics accessed on December 5, 2016: www.canadianvintners.com/info-centre/wine-statistics/).

Regardless of this still rather low level of world recognition for Canada-made wines, the Canadian wine industry shows a dynamic growth. The most recent, comprehensive wine industry economic study, “The economic impact of the wine and grape industry in Canada, 2015” prepared by A Frank, Rimerman + Co. LLP and published in March 2017, estimated the full economic impact of the wine and grape industry in Canada in the year 2015 to be about CAD 9.04 billion. The report shows that the full economic impact of the wine and grape industry in Ontario, the biggest wine-producing Canadian province, was at the level of about CAD 4.4 billion. In the same year, in BC the economic impact reached about CAD 2.8 billion (Frank, Rimerman + Co. LLP, 2017).

In comparison to total world wine production, the production volume of Canadian wines remains insignificant, and Canada is considered a small wine producer, with total production volume accounting for about 0.5% of all world wine production of about 28.2 billion litres. Regarding exports to the global marketplace, in 2015 Canada exported about 72.9 million litres of wine valued at about CAD 73.9 million, with premium wine (non-bulk) maintaining about 1.8 million litres of the total volume, valued at CAD 32.8 million. This was a significant increase in the volume of wine exports from past years, with a 237% increase between 2011 and 2015, as well as in the value of exports, which increased by 101% over the same period. Regardless of this growth in wine exports, Canada is still only ranked as the 27th biggest wine exporter in the world (by value of wine exports) (Canadian Vintners Association Website accessed on December 5, 2016: www.canadianvintners.com/info-centre/wine-statistics/).

Six Canadian provinces produce wine: Ontario, British Columbia, Quebec, Nova Scotia, New Brunswick and Prince Edward Island. Traditionally the highest volumes are generated in Ontario. British Columbia is Canada’s second biggest wine-producing region. Currently, Canadian winemaking provinces show no specialization in any specific wine or grape variety. This lack of specialization and the practice of producing comparatively low volumes of numerous wine types make Canadian wine production dispersed, negatively influencing international recognition of Canada as a wine- producing country.

This article was written by Karl Storchmann

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