European trade deal a chance for Canada's wine to shine

Brothers Allan and Brian Schmidt run one of Canadas most beautiful wineries, the peaceful and picturesqueVinelandEstatesin Ontarios Niagara region.

Their wine won several gold medals at an international competition this year. I couldnt help but wonder if they were trembling in fear in their cellar, awaiting the flood of French or Italian wine that will pour into the marketplace, now that Canada has a new trade deal with the EU. Nope.

The reality? Not at all.

Were already at the highest level of competition that you can have,Vinelandpresident Allan tells me. There havent been any trade barriers keeping wine out of our market for years now. I certainly dont see this as a huge negative effect.

'The Europeans will be open to our wines'- Wine journalist NatalieMacLean

Unlike Canadas cheese-makers and fisherieswho find themselves disadvantaged by the new deal, some in Canadas wine industry are thrilled by the prospect of new customers. Just ask the president of theCanadian Vintners Association. The agreement opens preferential market access to the EUs more than 500 million consumers, says DanPaszkowski.It creates new opportunities for Canadian wine exports to Europe.

Paszkowskibelieves theres not much of a threat to people likeVinelandsAllan and Brian Schmidt.

Canadian consumers wont see any fabulous new bargains on imported wine. The savings under the new deal will be insignificanta few pennies per bottle. Thats certainly not going to be enough to turn a wineaficionadoshead, or lure them away from buying a domestic wine.

Meanwhile on the other side of the deal, savings for Europeans who buy Canadian wine are bigger, but still not huge: a 45 cent price reduction on sparkling wine, 18 cents for still wine. NatalieMacLeansees huge potential for Canadian wine in Europe.

Shes the editor ofCanadas most visited wine website. We get more traffic than Ontarios liquor board, she boasts, There are a lot of thirsty people out there!

MacLeanbelieves the beauty of wine is its diversity. What we offer is different from what Europeans have now, she says. We specialize in cool climate wines and not just ice wine. Ourriesling,pinotnoir, sparkling wines, ourshirazandcabernetfrancthose are really big specialties for us both in Niagara and theOkanagan.The Europeans will be open to our wines.

MacLeanlooks back to the NAFTA agreement and what it did to spur Canadian vintners to up their game. We ripped up a lot of bad vines, she says. There was a higher drive to quality, and although our volume market share went down, we got a smaller piece of a much bigger pie. So our overall production went up, our quality went up, and the number of wineries skyrocketed, especially in BC and Niagara.

She says CETA will benefit Canadian consumers also, since an open export market for fine Canadian wines will again be a driver for quality here at home.

And its the customers here in Canada that Allan Schmidt is most anxious to win over. Over 70 per cent of the wine sold in Canada is imported. Another 20 per cent is blended wines, the product of home-grown grapes along with foreign wines. Only 10 per cent is totally Canadian.

We dont own the market yet and until we do, it really doesnt make sense to go after exports in a big way, says Schmidt. He notes that in France, people mostly drink French wine, just as in Italy, they drink Italian wine. The only reason Australian wines wines started showing up on Canadian shelves is because they had a surplus, and already owned 90 per cent of their market. So they looked outside for growth.

Schmidts point about conquering the home market first is something we hear frequently on Dragons Den. Entrepreneurs often come to pitch for an investment to help them go after the U.S. market, and the Dragons will point out they shouldnt necessarily look abroad while theres still so much potential market share at home.

Chris Wyse runs the Burrowing Owl Winery in Oliver, British Columbia. He and his father are actually happy with demand at home, and are focusing on markets other than Europe.

We have a good following in Canada, he says. Wed like to get a little more interest in the U.S. Its our neighbour and were seeing traction in Asia. From the West coast, that seems to be more of a natural channel for us. Maybe its different in Ontario.

Concerted effort

Turns out its not. Asia is where Ontarios Vineland also sees the most potential. Allan Schmidt has been exporting to China for close to 10 years, and says demand has picked up in the last three years. Theres a real hunger for western culture there, and they like the status symbol of purchasing higher quality wines.

Both the wine-makers I spoke to, Wyse of BCs Burrowing Owl and Schmidt of Ontarios Vineland, made a point to say theyd love to exploit the market in Europe. But in their view, the one thing theyll certainly need it marketing help.

Schmidt recommends a Wines of Canada promotional campaign to get a beachhead in Europe, since no individual winery would be able to make much of an impact on its own. We need to build more recognition as a wine-making country, and hed like to see the government help finance such a campaign.

Good luck with that. The feds have just coughed up $280 million contribution to a new fishery fund thats meant to offset the damage from the EU trade deal. And Canadian consumers may soon be lobbying for a break on the price of prescriptions drugs, since the deal could delay the arrival of generics by as much as a year.

I think Ill echo the Dragons, and encourage all the Canadian wineries to woo us at home, before striking out for foreign markets.