Relief for B.C. wineries protects 2024 vintage, jobs
British Columbia is home to a world-renowned wine industry that generates $3.75 billion annually and employs approximately 14,000 full-time workers.
Revenues generated by the industry include both direct wine sales and indirect revenue for businesses that rely on wine-related tourism. The industry creates jobs throughout the supply chain such as grape crushers, wine makers and bottlers, as well as jobs in related sectors like agriculture, tourism and hospitality.
As of June 2024, there were approximately 350 licensed grape-wine wineries in British Columbia. Each year, these wineries welcome more than 1,191,500 visitors.
Producing and selling wine in B.C.
B.C. liquor manufacturers must be licensed by the Liquor and Cannabis Regulation Branch (LCRB) and enter into a sales agreement with the BC Liquor Distribution Branch (LDB) to produce and sell alcohol in B.C.
The sales agreement authorizes the manufacturer to sell and distribute its products, and provides requirements relating to reporting sales, making payments and maintaining records.
The LDB’s winery sales agreements also enable government to further policy objectives, such as:
- promoting the use of B.C. agricultural inputs;
- supporting agri-tourism, encouraging the growth of small B.C. businesses; and
- fostering employment and economic activity.
For example, to produce BC Vinters Quality Alliance (VQA) and 100% B.C. grape wine, and receive benefits associated with LDB sales agreements (e.g., ability to direct deliver to hospitality and retail customers), B.C. wineries meet strict criteria in alignment with government policy, which drives significant investment, use of local inputs and support for agri-tourism.
In 2023, B.C. wines accounted for 45.1% of the market share in wine sales in the province.
Challenges faced by the industry
The wine industry in B.C. has recently experienced several compounding challenges, such as:
- multiple climate-related events adversely affecting production and tourism;
- supply chain disruptions; and
- inflationary pressures.
In January 2024, a particularly devastating event for the industry occurred when temperatures in the Okanagan-Similkameen region dropped below -20 C for several days. The wine industry estimates the deep-freeze event severely damaged or destroyed as much as 15% of grape vines and resulted in the loss of 90% of grape production.
As a result of this unprecedented event, there are significant concerns from affected wineries that limited grape availability will greatly impact production of a 2024 vintage and reduce the availability of B.C. wines starting in 2025.
To date, the Province has taken significant steps to mitigate the challenges faced by the wine industry, including:
- permitting land-based wineries to apply for a temporary exemption from the requirement in their LDB sales agreement to source 25% of their agricultural inputs from their owned or leased land;
- permitting wineries to apply to the LCRB for temporary waivers to the 4,500-litre minimum annual production requirement for annual licence renewals; and
- providing industry with $26 million for grape replant programs and $92.6 million in Production Insurance and AgriStability payments through the Ministry of Agriculture and Food; and
- launching a B.C. wine-grape-sector task force to support long-term crop resiliency.
Recognizing the particular risk posed to B.C.’s wine industry by the catastrophic loss of the 2024 vintage and ripple effects to ancillary sectors, the Province has been exploring options to support wineries affected by the significant grape shortage within the current fiscal landscape.