Ep. 2534 Cracking Canada: Understanding its government Liquor Control Boards and unlocking the opportunities | wine2wine Vinitaly Business Forum

Obviously, pretty much immediately post that was when American wines were pulled from the shelves and no longer allowed to be imported into the province. The one positive, as Mikaela said, is that this has opened up a massive gap in the market and on shelves. And one thing to keep in mind for Italy in general was they, for the last almost two years, have been actually right on the tail of The United States. And so even with American wines on the shelf, there was some very, very healthy competition. We're talking maybe a percent or two as far as share of market and people purchasing these wines. So there already is a massively established Italian market for Italian wines in Ontario. And with the LCBO, this is now a new opportunity to basically fill the gaps. Welcome to the wine to wine in Italy business forum twenty twenty five Chicago edition, where global wine professionals share insights, strategies, and inspiration from this year's conference. Let's dive into today's session and explore the ideas shaping the future of wine. Good afternoon, everyone. Welcome. I'd like to introduce the next seminar, which is part of the cycle, of the North American market focus called Cracking Canada. Understanding its government liquor boards and unlocking the opportunities within and beyond. This is certainly a difficult task because of the intricacies, the difficulties of every province being between different between themselves rather than all the opportunities that can arise in a moment where the market is living. Certainly a particular moment. To address this topic, which is not a small topic for thirty minutes, we have, Michaela Morris. Thank you, Michaela. Diep WEST but especially, writer, a contributor to the canter, if I'm correct. First and foremost, rather than a pedigree in the industry between the importing and the buying processes in Canada. Jenna Briscoe as well coming from, the Western KEYWORD of Canada, which we will discover is, so different from the East, itself. And, as well bringing, experience as educator, buyer, and importer in the Canadian wine industry. Thank you so much, Alessandro, for the introduction and for being here because you've done a lot of work in Canada. So you understand the market very well. I'd also like to thank Jenna, who I'm presenting with today. Because Jenna is the one who did all of the research to get the most recent data for this presentation. And it's not the easiest thing to do in Canada sometimes to glean that so these sorts of, statistics. So thank you so much, Jenna. Cracking Canada. Understanding its government liquor control boards and unlocking the opportunities within and beyond. You might notice that we did not include the word monopoly in the title. And this is because sometimes referring to Canada as a monopoly is a bit of a misnomer. In our country, we have 10 provinces. These are the equivalent more or less of the states in, in here in The United States. So we've got these 10 provinces. We also have three territories and liquor distribution falls under the legislation of the provincial governments. What this means is that we have, in fact, 13 markets in Canada, each with its own unique system. And each of these provinces and territories have their own identity and their own culture. So different wine markets. Before we get into the different wine markets, I just wanna take a quick look at the national wine market. If you look at the value of wine that we brought in last year, 2,670,000,000.00 Canadian dollars. This is before markup and taxes. If my math and my information serves me correct, this is about one third to one quarter of what The US brought in in the same time period. But you have to remember that Canada has about one eighth of the population of The US. So even if we are smaller in size, in population, we are a valid wine market in case you didn't realize that already. You will also notice here that the top three countries of of, export for Canada across Canada are France, Italy, and The United States. In March 2025, we pressed pause on bringing in wine from The United States and pulled US alcohol products from our shelves in response to the the tariffs on Canadian products coming into The US. You can see that this leaves a huge gap and opportunities, in my opinion, and I think many others for other markets beyond The US for wine in Canada. Looking further into the national market, it's also important to note that for many years, wine was increasing in terms of, both volume and value. But in the last couple of years, we've seen a decline. So in volume in the last year in 2023, we saw a 3% decrease in volume. There was a slight increase in value. However, that is only attributable to inflation. So the market overall is we could say flat and in a very slight decline. One other thing that I wanna point out on this is that 28% of the wine sold in Canada is domestic wine. It's deemed as domestic wine. So for those of you who don't know, we actually make wine in Canada from our own grapes. And there are four provinces that produce wine. So Today, we're going to look at four of the most important provinces in Canada for wine sales. So on the West Coast, British Columbia and Alberta together, they represent about 22% of the wine sold in all of Canada. Going to the central part of the country, Ontario was always regarded as the biggest market in Canada for wine. However, it is now second to Quebec that, it takes about thirty three percent of wine sales. Just over 33% of all wine sales in Canada is coming from Quebec. Again, just to put this into perspective, the population of Quebec is about 9,000,000 versus Ontario, which is 16,000,000. We'll talk further about that. So we can keep going KEYWORD here. We're gonna start in Ontario. Ontario is our most populous province. It does have a a diverse ethnicity. The Italian community is very strong there. So the Italian culture, Italian wines has always been very strong, in Ontario. On the other hand, Ontario is also our largest wine producer. So making a lot of wine and people have become more and more loyal to our local wines, than they were even in the past. It's also in terms of a per capita consumption while we're they're making a lot of wine, they're actually below the average, which you may have gleaned from the last statement I made with respect to Quebec. And they're also liquor control board in Ontario is referred to as the LCBO. I wanna, again, underline the LCBO. I wanna again underline the fact that that the LCBO does not equal Canada. So if you are a wine producer and you work in Canada and you work with the LCBO, that does not mean that you work in the rest of provinces of Canada. The LCBO is exclusive just to Ontario. Now each of these liquor control boards that we have across Canada work differently. They all act as regulators and revenue collectors. In the case of Ontario, they also import, distribute, and retail wine. And this is where we talk about, monopoly simply because the retail stores in Ontario are the strongest force. So, 80 almost 82 of all wines that are sold in Ontario are sold at the government stores. Since 2016, grocery stores have been, allowed to sell wine. However, the wine that are sold through grocery stores in Ontario, they have to be wines that are listed competition there with those. Speed dating in Canada here, just to give you the the, the the point. So there are different categories for wine listings of the LCBO. But if you get a general listing with, LCBO stores and you can keep that listing, you can sell a lot of wine. Typically, these are more the the volume based wines. They also have another avenue, which which is their vintages, program, which tends to be more of the the these boutique, wines. They did start an ecommerce project, and it looked like it was something that it would take off during the pandemic. But it has to this point fizzled, which means that people are still buying their wines at bricks a