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04.23.2014  
 

B.C. Industry Prepares for Shake-Up

Small and mid-size wineries want equal representation in British Columbia Wine Institute

 
by Peter Mitham
 
 
Okanagan crush pad
 
Christine Coletta, co-owner of Okanagan Crush Pad (above) said small wineries are particularly concerned about how governance changes could affect their market access.
Penticton, B.C.—Small and mid-size wineries are hoping for a bigger voice as the British Columbia Wine Institute undertakes a governance review.

Right now, large wineries have three representatives at the institute, while small and medium-sized wineries have two each. Meanwhile, the unique concerns and challenges of each group have strained relationships among members and prompted smaller wineries—those producing 5,000 cases and less—to seek greater representation.

“I personally feel very strongly that all categories should be represented by the same number of directors, and my suggestion would be there be three directors in each of the small, medium, and large categories,” Harry McWatters, a veteran of the industry with more than four decades’ experience, told Wines & Vines.

A founder of Sumac Ridge Estate Winery and Hawthorne Mountain Vineyards, McWatters worked with Vincor Canada following its purchase of the properties before striking out on his own as a private consultant and educator.

He has since launched a new line of wines under his own name and become familiar once again with the concerns of small wineries.

While the British Columbia Wine Institute is charged with marketing and promoting wine made entirely from B.C.-grown grapes and bearing the B.C. Vintners’ Quality Alliance designation, McWatters said smaller wineries have concerns distinct from those of large wineries and deserve a strong voice. Moreover, of the 235 grape wineries in the province, just four are deemed “large.”

“People in certain categories have more in common,” McWatters said. “There are things that affect the wineries that are in the small category that do not affect the medium or the large.”

Proposed changes for the province’s liquor industry were released in February, following a government review of the sector, and have brought matters to a head (see “Timeline Uncertain for Canada Liquor Legislation”). 

The bid to allow liquor sales in grocery stores and the potential for wholesale pricing as well as secondary tasting rooms have ramifications unique to each segment of the wine industry.

Small wineries are particularly concerned about how the changes could affect market access and their profitability, said Christine Coletta, executive director of the British Columbia Wine Institute (BCWI) from its establishment in 1989 until 1999 and now co-owner of Okanagan Crush Pad and Haywire Winery, both in Summerland, B.C.

“They’ve been very receptive to hearing what we have to say,” she said of the BCWI.

What all sides want to avoid is a replay of the fractious days of the early 2000s, when several wineries that opted to remain independent of BCWI formed a rival group. (The institute has always been a voluntary organization; even today its membership is just 138, well short of the 235 grape wineries in the province.)

In 2008, in an attempt to heal the rift, the government established the British Columbia Wine Authority to administer a new set of production standards for B.C. wine and provide independent oversight of B.C. wine standards (see “B.C. Wine Authority Up and Running”).  The move freed BCWI to oversee marketing and advocacy on behalf of the wine industry.

“There’s a cost to the industry to support each of those groups,” Coletta said, noting her belief that a new trade association for small wineries in tandem with BCWI isn’t a good use of the industry’s limited resources.

This is the scenario that played out in Ontario in 2009, when major wineries withdrew from the Wine Council of Ontario to form the Winery and Grower Alliance of Ontario.

“We’ve got a lot of work to do as a wine region, and to manage two trade associations just puts our energy in the wrong place,” she said. “If we’re going to carve out market share and develop new markets in the export arena, we need to have everyone at the same table pulling in the same direction. We don’t need people polarizing the industry.”

BCWI president Miles Prodan declined to provide further comment to Wines & Vines beyond what he said in a news release announcing the review.

The growth of the industry and the provincial government’s recent review of the sector were key reasons for the review, which will be conducted by a third-party and submit recommendations for consideration by BCWI directors. A timeline for completion has not been established.

“In undertaking this review, it is expected that all BCWI members will have an opportunity to provide input into the review process,” the BCWI stated. “Final recommendations will be implemented and enacted subject to member approval and bylaw changes, as required.” 

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