A government policy meant to support B.C. wineries is now backfiring, according to industry leaders, making it harder to get local wine onto shelves during the BC General Employees’ Union strike.
The “Olympic Average” policy was originally designed to help wineries stay afloat after weather disasters by keeping government revenue neutral when producers replace lost B.C. grapes with imported fruit.
But winery owners and industry representatives say the BC Liquor Distribution Branch is now applying the rule too broadly, effectively adding a new tax on small and mid-sized wineries.
“The issue becomes, if you go over this cap, this Olympic Average calculation, then you have to pay the same kind of markup you would if you were bringing in international product,” said Jeff Guignard, CEO of the BC Wine Growers Association.
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Ron Kubek, owner of Lightning Rock Winery in Summerland, says the policy change is hitting local producers hard.
“We have a huge demand for our wine,” he said. “The problem is, if we exceed our Olympic Average because they’ve applied it to our whole portfolio instead of just last year’s wine, we’re going to be paying an 89-per cent markup on wines made in BC that were formerly exempt.”
Guignard says there is a solution to help wineries. “If it’s 100 per cent BC wine made in a previous year, unrelated to any imported fruit, it shouldn’t be part of that calculation.”
Winemakers warn that if the policy isn’t fixed, restaurants and liquor stores could soon see even less local wine available.
“We’re getting all these new customers, introducing more British Columbians to great B.C. wine,” Kubek said. “But because of the Liquor Distribution Branch misinterpreting the policy and using it like a tax grab, we may have to stop selling.”
Agriculture and Food Minister Lana Popham says the province will continue to help the wine industry.
“Our government has helped the wine sector through challenging times with a number of different supports and will continue to work closely with the industry to provide stability and ensure its long-term success,” said Popham.
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