Province pauses markup on non-B.C. grapes for local wineries

UPDATE: 4 p.m.

B.C. wineries are looking to Washington State now that the provincial government has allowed the use of out-of-province grapes to help the sector recover amid farming struggles, said the owner of Poplar Grove Winery.

Tony Holler said there is an over supply of wine grapes in the state.

"We started this process looking at importing grapes in February and signed contracts, I think at the end of March, because the growers in Washington State need certainty as well," he said.

"We've secured a supply, and we're also working with a lot of small wineries, because it's very difficult for them, as a small winery, to bring grape juice up in a small quantity.

"I thank the BC government for what they're doing."

South Okanagan wineries have been vocal on needing relief from markups this year related to bringing in out-of-province grapes, after a devastating loss from January’s cold snap.

Boundary-Similkameen MLA Roly Russel said these changes will provide benefits by compensation on par with what a winery would have received in the past for making 100 per cent B.C. wine.

"It is a financial compensation piece to be able to offset some of those increased costs of importing, as well as a regulatory change piece that's around recognizing that the regulations and rules are very strict around making BC wine," he said.

Russell acknowledged that while the announcement is not a silver bullet in terms of supporting the industry across the region, there are multiple areas the province is working on in addressing the issues.

"Tying to figure out, 'Okay, how do we make sure that we can get some support to those farmers to get the right grapes back and right vines back in the ground?'" he added.

Dapinder Gill, a local grape grower, said the survival of the grape growers depends on the survival of a winery.

"The wineries are able to survive with their talent, with their market survival, until the next year, when we have grapes in 2025 and then we'll be able to supply the grapes to the wineries," he said.

"It's a good compromise for between the wineries and the grape growers, where it helps the wineries for the 2024 vintage, and if the wineries are in business in 2025 then the grape growers are ready to sell grapes to them next year."

Previously, wineries were faced with a nearly 90 per cent markup on the first $11.75 of a wholesale bottle of wine, or per litre, and then the further nearly 30 per cent markup thereafter, when they use grapes from out of province.

For 2024, the Liquor and Cannabis Regulation Branch is exempting wineries from producing at least 4,500 litres of their wine on-site each year, for those that experienced crop failure, on a case-by-case basis.

This means that the wineries that have been granted an exemption that if they're unable to produce any wine this year, won't lose their manufacturing licenses and can continue to operate.

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ORIGINAL: 12:12 p.m.

B.C. wineries will be able to use grapes and grape juice from outside the province for their 2024 vintages without paying additional fees, after the provincial government announced a temporary change in it rules Thursday due to this past winter's devastation to local vineyards.

Wineries across the province, particularly in the Southern Interior, were hit hard by a cold snap this past January, wiping out much of the province's 2024 yield of grapes.

In response, Boundary-Similkameen MLA Roly Russell was at Naramata's Poplar Grove Winery Thursday morning to announce the province will be relaxing its rules that have previously seen B.C. wineries effectively penalized for using grape juice that comes from outside B.C.

"Our government is committed to supporting the long-term sustainability and strength of B.C.'s world-class wine industry," said Russell.

"We know what a difficult time it has been. These supports for the sector will help give our wineries the certainty to plan for this year's wine production and continue delivering the enormous value they contribute to B.C.'s economy."

The province says more information on eligibility and related requirements will be provided to wineries in fall 2024.

“This will give affected wineries financial certainty if they choose to enter into contracts now, source non-B.C. grapes and grape juice, retain jobs and skilled resources in B.C., and plan for production of a 2024 replacement vintage,” the province says in a press release.

Miles Prodan, president and CEO of Wine Growers British Columbia, said last winter's deep freeze threatened the viability of the B.C. wine industry.

“We'd like to thank the Premier, Minister Farnworth and our local MLAs for responding so quickly with today's announcement and giving B.C. wine growers the confidence to plan for the day when they can return to 100% BC VQA wines and the assurance that this critical industry will continue for years to come,” he said in a statement.

The wine industry employs more than 14,000 full-time workers in the province. There are approximately 350 licensed grape wine wineries in British Columbia.