Wines & Vines Home
   
 
Welcome Guest
LOGIN |  CREATE ACCOUNT
 
ADVERTISEMENT
 
 
 
03.20.2013  
 

B.C. Industry Contributes $2 Billion

New report estimates impact of province's wine industry; taxes set to rise April 1

 
by Peter Mitham
 
 
british columbia wine industry impact
 
Sources: The Economic Impact of the Wine and Grape Industry in Canada (Frank, Rimerman + Co. LLP, 2013); The Economic Impact of Washington State Wine and Grapes (Stonebridge Research Group LLC, 2012); The Economic Impact of the Wine and Wine Grape Industries on the Oregon Economy (Full Glass Research Inc., 2011).
Penticton, B.C., Canada—Spring has delivered a bouquet of optimism to British Columbia’s buoyant wine industry—and a reminder that the industry pays its share of taxes.

A report about the economic impact of the province’s wine industry suggests that it’s the very picture of health, with 212 wineries and 864 vineyards with more than 9,860 acres. The report pegs the industry’s economic impact at $2 billion, or $42 for every domestic bottle of wine produced. (All figures are reported in Canadian dollars; a Canadian dollar is worth about 97 cents U.S. today, though it has been trading at about par with the U.S. dollar during the past two years).

By comparison, a study last year estimated the economic impact of the Washington state wine industry at $8.6 billion (see “Washington Wine’s Economic Impact”), while the impact of the industry in Oregon was valued at $2.7 billion in a 2011 report (see “Breaking Down the Oregon Wine Report”).

Mike Raffan, owner of Township 7 Vineyards & Winery, which has locations in both the Okanagan and the Fraser Valley, was on the board of the B.C. Wine Institute when the report was commissioned in 2011. He stepped down in 2012 after five years with the institute, but is thrilled—both as one of the initiators of the report as well as a wine producer—to see documentation of the industry’s impact.

Quantifying industry impact
The report is the first of its kind for the industry, and it gives substance to what many have suspected but haven’t had the numbers to support.

“We knew it was big, but we had no idea what that number was,” he told Wines & Vines. “We’ve never been able to quantify what we mean to the province.”

The report, prepared by Frank, Rimerman + Co. of Sonoma, Calif., was undertaken in conjunction with the Canadian Vintners Association, the Winery & Grower Alliance of Ontario, the British Columbia Wine Institute and the Winery Association of Nova Scotia. Raffan said the participation of the national wine industry made the report a cost-effective endeavour for all regions across the country.

The report indicates that B.C. represents about a third of the Canadian wine industry, second only to Ontario in importance. Ontario’s wine industry has an impact of $3.3 billion, close to half the $6.8 billion impact of Canada’s wine industry as a whole.

British Columbia is also at the top when it comes to economic impact, with an average $42.07 impact per bottle versus the national average of $30.34. Ontario wines have an economic impact of $39.73 per bottle.

More than their fair share?
What stands out in the study, however, is just how highly taxed Canada’s wine industry is.

While there are varying measures of economic impact and taxes, the new study indicates that more than 10% of the economic impact of Canada’s industry is attributable to taxes.

The industry pays $879 million annually in direct taxes, with an additional $342 million contributed to government coffers through liquor board markups (government retailers dominate the wine business everywhere in Canada except Alberta, which privatized liquor sales and distribution in 1993).

Seen as a percentage of the industry’s total economic impact in Canada, taxes represent 12.9% nationally. The contribution is greatest in Quebec, where the relatively small wine industry sees 15% of its impact delivered through tax revenues. Producers in B.C. get off comparatively lightly, with just 11.1% of the economic impact of their wines attributable to taxes.

It’s a stark difference from neighboring Washington state (U.S.), where state and federal taxes account for just 6.3% of the economic impact of the state’s wine industry. The contribution of taxes is even less in sales-tax-free Oregon, where the industry delivers a puny 2.4% impact via taxes.

The numbers in Canada highlight the onerous burden of government on the industry, according to Jordan Bateman, B.C. director for the Canadian Taxpayers’ Federation.

“The wine industry pays all of the usual small business and corporate income taxes that every business pays, and then there’s all the liquor taxes attached to it as well,” he said. “There’s no doubt that when it comes to consumer products, wine is among the most taxed products in British Columbia.”

Changes to B.C.’s sales tax regime starting April 1 won’t lessen the impact of taxes, either.

The sales tax payable on wine will rise from 7% to 10%. Designed to keep alcohol prices stable when the government changes how it levies sales taxes across the board, consumers won’t notice the change—but producers will.

“My $20 bottle of wine is less 12% taxes today, and on April 1 it’s going to be less 15%. So that tax hurts,” Raffan said. “It’s unlikely our industry is going to be able to pass that on.”

Potential for change
With a general election in British Columbia set for May 14, Bateman feels there&rsqu o;s an opportunity for parties to pledge to make changes.

“I think we will see political parties try to one-up each other on lowering taxes and regulatory burdens on wineries in an effort to try to win those swing ridings,” he said.

Generally, Bateman would like to see the province less reliant on so-called "sin taxes." The provincial government has made much of taxing fuel to reduce carbon emissions, on the basis that taxes can modify behavior and where business investment occurs.

“We (tax) things we want less of,” he said. “By that same standard, do we want less wine, less wine jobs, less wine industry, less wine tourism? Because the way we’re taxing it indicates that we do.”

SHARE »
Close
 
Currently no comments posted for this article.
 
CURRENT NEWS INDEX »


 
Wines & Vines Home
 
866.453.9701 | 415.453.9700 | Fax: 415.453.2517
65 Mitchell Blvd., Ste. A San Rafael, CA 94903
info@winesandvines.com
Wine Industry Metrics
 
Off-Premise Sales » Month   12 Months  
November 2014 $708 million
5%
$7,844 million
6%
November 2013 $673 million $7,428 million
     
Direct-to-Consumer Shipments » Month   12 Months  
November 2014 $274 million
21%
$1,799 million
16%
November 2013 $225 million $1,558 million
     
Winery Job Index » Month   12 Months  
November 2014 127
-5%
226
15%
November 2013 134 196
     
 
MORE » Released on 12.15.2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 

FEATURES
 

Practical Winery & Vineyard Library
 
Search the PWV archive »
 
 

Direct To Consumer
Wine Shipping Report
2014
 
Download full report »
 
 

CALENDAR
  • January 7
     
    Putting Your Brand to Work
     
  • January 9-18
     
    Icewine Festival
     
  • January 13-16
     
    VinCO
     
  • January 15
     
    WineFlavor 101B
     
  • MORE »
 

READER COMMENTS
 
Article: Grape Industry Lukewarm on Immigration Act »
 
A band-aid it may be but instead of the negative tone of this article which...
Reader: Guest
 
Article: Oregon Wine Institute Plans for the Future »
 
When Mark is involved, things are going to work out just great! We miss the...
Reader: Peter Bell
 
Article: Spanish Cooper Sells Chinese Oak »
 
I would love to find Us wineries using the Chinese oak barrels. Do you know...
Reader: Guest
 
Article: Prohibition Laws Linger 81 Years Later »
 
Trader Joe's (Union Square) and Whole Foods (Upper West Side) both have wine shops attached...
Reader: Guest
 
Article: Prohibition Laws Linger 81 Years Later »
 
Maybe the economy could use another boost by repealing the post-prohibitionary laws too. Make it...
Reader: csm noble
 
 


Directory/Buyer's Guide — Your Wine Industry Marketplace
 
 
WINERY SEARCH
 
 
Advanced Search »
SUPPLIER SEARCH
   by Product
 by Company Name or Brand
 
Browse by Category »
2015 Directory/Buyer's Guide
The Wines & Vines Directory and Buyer's Guide
 
 
EXPANDED ONLINE SEARCH INCLUDED WITH PURCHASE
 
ORDER NOW »
 
LEARN MORE »
 
 
Wines & Vines Magazine
 
 
LEARN MORE »
 
SUBSCRIBE »
 
Digital Edition Now Available!
Wines & Vines Digital Edition Now Available
 
LEARN MORE »
 
ORDER NOW »
 
 
The Wines & Vines Online Marketing System
 
The Industry Standard winery marketing application
 
FREE LIVE DEMO »
 
VIEW VIDEO »
 
 
 
 
Latest Job Listings
 Navision Developer
 Graton, CA
General Administration and
 Director Of Contract ...
 Graton, CA
Sales and Marketing
 Quality Assurance Supe...
 Graton, CA
Winemaking and Production
 Southern California Sa...
 Southern California, CA
Sales and Marketing
 Assistant Winemaker
 Prosser, WA
Winemaking and Production
 Wine Club And Dtc Mana...
 Calistoga, CA
DTC, Tasting Room and Retai
 Director Of Marketing ...
 Chicago, IL
Sales and Marketing
 Sales Rep - Kansas Cit...
 Kansas City, MO
Sales and Marketing
 Director Of Hospitalit...
 Napa, CA
DTC, Tasting Room and Retai
 Skilled Cellar Worker ...
 Santa Rosa, CA
Winemaking and Production
 
More Job Listings >>
Follow Us On:
 
 





Home  |  About Us  |  Editors  |  Subscribe  |  Print Edition  |  Digital Edition

Advertise  |  Site Map  |  Contact Us  |  Privacy Policy
 
 
Copyright © 2001-2014 by Wine Communications Group, Inc. All Rights Reserved.
No material may be reproduced without written permission of the Publisher.
Wines&Vines does not assume any responsibility for any unsolicited manuscripts or materials.