Ep. 2534 Cracking Canada: Understanding its government Liquor Control Boards and unlocking the opportunities | wine2wine Vinitaly Business Forum
wine2wine Vinitaly Business Forum
Episode Summary
<think> I need to create a concise content analysis of the provided text about the Canadian wine market, following a specific format with maximum word limits. Let me first understand what the text is about and identify the key themes. The text appears to be a transcript from a business forum session titled "Cracking Canada: Understanding its government Liquor Control Boards and unlocking the opportunities." It features presentations by Mikaela Morris and Jenna Briscoe discussing the Canadian wine market, with a focus on how different provinces manage liquor distribution and the opportunities for wine producers (particularly Italian ones). Key points from the text: 1. Canada has 10 provinces and 3 territories, each with its own liquor control system (13 different markets) 2. The national wine market value is about CAD 2.67 billion (before markup and taxes) 3. Top wine import sources: France, Italy, and the United States 4. In March 2025, Canada stopped importing US wines in response to US tariffs on Canadian products 5. Wine market has seen a 3% volume decrease in 2023, with value increase only attributable to inflation 6. 28% of wine sold in Canada is domestic (from Canadian producers) 7. Four key provinces discussed: - Quebec (33% of Canada's wine sales, highest per capita consumption) - Ontario (second largest market, LCBO system) - British Columbia (high per capita consumption, especially white wine) - Alberta (fully privatized retail system) The text details how each province's liquor control system works: - Ontario: LCBO (government stores account for 82% of sales) - Quebec: SAQ (government stores account for 80% of sales) - British Columbia: BCLDB (government stores account for 45% of sales, with private stores making up the rest) - Alberta: Fully privatized retail system Key trends mentioned: - Shift toward fresher styles (decline in red wines, uptick in white and rosé) - Value-driven purchasing - High-low pricing strategies - Lighter alcohol content preferences - Growth in natural wines (especially in Quebec) - Small format bottles becoming popular - Sustainability certifications increasingly important The text also mentions that Italy has overtaken the US in market share in Ontario following the removal of US wines from shelves, creating opportunities for Italian producers. Now, let me check the search results to see if they provide additional context or confirm information from the transcript: From search result [1], I see information about the CETA (Comprehensive Economic and Trade Agreement) between Canada and EU, including amendments to the Agreement on Trade in Wines and Spirit Drinks, with entry into force set for June 1, 2025. From search result [2] and [3], I see information about US wine exports to Canada dropping significantly (72.5% in March 2025) due to Trump's tariffs and Canadian retaliatory measures. Search result [7] confirms Canada imposed 25% tariffs on US beer, spirits, and wine starting March 13, 2025. Search result [11] mentions Canada imposing 25% tariffs on $30 billion in goods from the US effective February 4, 2025. Search result [17] indicates Canada removed retaliatory tariffs on US goods covered under CUSMA effective September 1, 2025. This confirms the context mentioned in the transcript about US wines being pulled from shelves in March 2025 due to tariff disputes. Now, I'll create the content analysis following the requested format: **Content Analysis** **Key Themes (max 5 points)** 1. Fragmented provincial liquor control systems across Canada's 13 markets 2. Impact of US-Canada trade tensions on wine market dynamics 3. Shift in consumer preferences toward lighter wines and sustainability 4. Opportunities for European producers following US wine removal 5. Provincial variations in market structure and consumer behavior **Summary (max 200 words)** [Brief summary] **Key Takeaways (max 6 points)** - [takeaway] - [takeaway] **Notable Quotes (max 3)** - "[quote]" **Follow-up Questions (max 3)** 1. [question] Let me now craft each section with the word limits in mind. For Key Themes, I'll identify the 5 most prominent themes from the text: 1. Fragmented provincial liquor control systems across Canada's 13 markets - The text emphasizes that Canada has 10 provinces and 3 territories, each with its own liquor distribution system, making it 13 distinct markets rather than one unified market. 2. Impact of US-Canada trade tensions on wine market dynamics - The text discusses how US wines were pulled from shelves in March 2025 due to tariff disputes, creating significant market gaps. 3. Shift in consumer preferences toward lighter wines and sustainability - Multiple trends are mentioned including decline in red wine consumption, growth in white/rosé, natural wines, and importance of sustainability certifications. 4. Opportunities for European producers following US wine removal - The text specifically notes that Italy has overtaken the US in market share in Ontario, creating opportunities for European producers. 5. Provincial variations in market structure and consumer behavior - The text details how Quebec, Ontario, BC, and Alberta have very different market structures and consumer preferences. For the Summary (max 200 words), I'll provide a concise overview of the main points. For Key Takeaways (max 6 points), I'll identify the most actionable insights. For Notable Quotes (max 3), I'll select impactful statements from the text. For Follow-up Questions (max 3), I'll pose relevant questions that extend the discussion. Now I'll write the complete analysis within the word limits. </think> **Content Analysis** **Key Themes (max 5 points)** 1. Fragmented provincial liquor control systems across Canada's 13 distinct markets 2. Impact of US-Canada trade tensions on wine market dynamics and opportunities 3. Shift in consumer preferences toward lighter wines, sustainability, and value-driven purchases 4. Provincial variations in market structure, consumer behavior, and regulatory approaches 5. Emerging opportunities for European producers following US wine removal from shelves **Summary (max 200 words)** The transcript details Canada's complex wine market structure, emphasizing that Canada comprises 13 distinct markets (10 provinces and 3 territories) with unique liquor distribution systems. The national wine market value reached CAD 2.67 billion (pre-markup), with France, Italy, and the US as top suppliers. In March 2025, Canada removed US wines from shelves in response to US tariffs, creating significant market gaps. The market has seen a 3% volume decline in 2023, with value increases attributable to inflation rather than growth. Key provincial markets include Quebec (33% of national sales, highest per capita consumption), Ontario (LCBO system controlling 82% of sales), British Columbia (45% government stores, high white wine consumption), and Alberta (fully privatized retail). Consumer trends show declining red wine consumption (down 10% in Quebec over five years), growing interest in white/rosé wines, natural wines, sustainability certifications, and smaller formats. Italy has overtaken the US in Ontario's market share following the US wine removal, presenting opportunities for European producers to fill the gap left by American wines, which previously held strong market positions. **Key Takeaways (max 6 points)** - Canada's wine market isn't monolithic but comprises 13 distinct provincial/territorial markets with different regulations - US wine removal created immediate opportunities for Italian and other European producers to capture market share - Quebec leads in per capita wine consumption and spending, with strong French cultural influences - Sustainability certifications are increasingly critical for market access, especially in Quebec's SAQ assortment planning - Consumer preferences are shifting toward lighter wines, with red wine declining while white/rosé grows - Private retail channels (45% in BC, 100% in Alberta) offer alternatives to government store listings **Notable Quotes (max 3)** - "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." - "The one positive... is that this has opened up a massive gap in the market and on shelves. And one thing to keep in mind for Italy... they have been actually right on the tail of The United States." - "In Quebec, the SAQ puts out... the bulk of tenders explicitly state that only offers of wine holding a sustainability slash fair trade certification recognized in the province of Quebec will be considered." **Follow-up Questions (max 3)** 1. How might the September 2025 removal of Canadian retaliatory tariffs on US goods (per search result [17]) impact the current market opportunities for European producers? 2. What specific strategies should European wine producers employ to navigate the different tender processes across Canada's provincial liquor boards? 3. How might the CETA amendments effective June 2025 (per search result [1]) further influence European wine market access in Canada beyond the current US tariff situation?
About This Episode
The North American wine market is experiencing a decline in alcohol sales due to the government's policy of intricacy between provinces and their own culture, but the company is introducing a new seminar to explore the future of wine. The decline is attributed to inflation and a decrease in alcohol sales from the US, but the company is making wine from their own grapes and producing it in Ontario. The consignment program is a tender process and requires an appointed agent to promote and sell the wine. The French market is strong for wine with food, but the Canadian market is strong for alcohol. The challenges of living healthy and advantaged lifestyle in British Columbia, where wines are expensive and not as popular, and the potential for growth in retail price brands are discussed.
Transcript
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
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