SUPPORTING BRITISH COLUMBIA’S DEVASTATED WINE INDUSTRY (2024)

Issue

Over the past two years, vineyards throughout British Columbia have experienced extreme cold weather events. The most recent event occurred between January 11th and 15th, 2024, causing an estimated 97-99% reduction in grape and wine production. Translated into economic terms, vineyards, wineries, and suppliers across the province will experience a $440-$445 million revenue loss in 2024.

Background

During the winter of 2022/2023, a cold weather event took place across the Okanagan Valley, where temperatures suddenly dropped to record lows, resulting in a 54% reduction in grape crops, 45% of total planted acreage suffering long-term damage, and 29% of total acreage needing to be re-planted. The impact of this crop damage included a $133 million revenue loss, a 20% reduction in full-time employment in vineyards and winery staff province-wide, and over $200 million in indirect economic revenue loss to suppliers, liquor distributors, retailers, and restaurants.[1]

This year, a more extreme cold weather event occurred between January 11th and 15th, 2024, causing an estimated 97-99% decrease in grape and wine production. The loss is forecasted to be between $440-$445 million for 2024’s vintage or lack thereof, and 25% of British Columbia wineries were up for sale by the end of January 2024. [2]

The BC Wine industry is not only a major source of tax revenue but also employs over 14,000 full-time equivalent workers, totalling approximately $754 million in annual wages. Wineries also serve as a major tourism draw, which saw a 64.5% increase between 2011 and 2019, and supported 3,912 jobs and over $174 million in wages specific to wine-related travel in Canada in 2019 alone.[3]

In acknowledgement and support of this vital industry, the Provincial Government has added another $70 million to the existing $15 million Perennial Crop Renewal Program to help farmers replace their damaged and destroyed plants. Furthermore, the Premier also announced that a BC wine grape sector task force will be created to help producers remain profitable and resilient as they face ongoing climate change.

While this is welcomed news, BC’s land-based wineries remain at imminent risk of losing their ability to produce and sell wine.

British Columbia is home to Canada’s largest wine-producing province and has two types of winery manufacturing agreements: commercial wineries and land-based wineries. Of the 428 licensed wineries in BC, 295 are classified as land-based as of 2022. Land-based wineries account for the many boutique wineries that dot the Okanagan, Similkameen, and Fraser Valley, as well as Vancouver Island and the surrounding Gulf Islands. While generally easier to operate than a commercial winery, land-based wineries must use 100% BC grapes or juice, at least 25% of the grapes from their own acreage,[4] and produce 4,500 litres (approximately 500 cases) of wine each year.[5] In the event a land-based winery does not satisfy these production requirements, it would lose its manufacturing license, preventing it from producing new wine and selling current inventory already in bottles. Unfortunately, with 2024’s extreme crop damage, producing any wine this year, let alone 4,500 litres, will be almost impossible.

With an industry as crucial as British Columbia’s wine and grape industry, BC’s Minister of Public Safety and Solicitor General has the authority to provide temporary regulatory relief to land-based winery manufacturing requirements, thereby giving time for damaged crops to either heal or be replanted.

THE CHAMBER RECOMMENDS

That the Provincial Government:

1. Suspend the minimum production requirements for land-based wineries until such time as crop damage has been mitigated.
2. Allow BC land-based wineries to purchase and utilize non-BC grapes and grape juice in order to maintain production and sales until damaged and replaced crops begin producing grapes, with the understanding that labelling denotes the grapes' place of origin.