Ontario tax may impact NY grapegrowers

Any New York wine grape growers who have been selling their produce to neighboring Ontario winemakers might find that revenue source endangered.

“The Ontario provincial government has set up a huge greenbelt around Toronto, and now, through a selective tax increase on low-cost blended wines made partly from foreign wines, is trying to encourage people to sip pricier products made entirely from local grapes,” reports the Toronto Globe & Mail newspaper.

“The goal: to boost the fortunes of grape growers while ensuring the future of agricultural land -- to keep it from sprouting subdivisions.

“But the big wineries aren’t convinced. They say the tax will lead consumers to buy even cheaper, totally foreign wines instead of their blended varieties, damaging their business and undermining farmland preservation.”

The issue has caused such a rift that Canadian companies selling blended wines have withdrawn from the Wine Council of Ontario, an industry group that backs the tax move, and created a rival trade organization.

The new tax amounts to about 62 cents on an $8 bottle. It goes into effect on July 1, and the $12 million expected to be raised annually is being aimed at promoting locally-sourced, upscale wines. The view of the government and boutique wineries is that to prosper, vintners should specialize in brands with a better pedigree, those labelled Vintners Quality Alliance, the appellation for premium domestic wines using 100% Canadian content.

You can read the complete Globe & Mail story here.

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