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Trends and Responses in the Wine Industry


What does the future hold for the wine industry? Participants at MNP’s winery round table, Trends and Responses in the Wine Industry, explored that question. Here are a few highlights from the presentations.

I spoke about the impact the changes resulting from Bill C-311 would have on B.C. wineries. Some of the points from my presentation were:

  • Canadian per capita wine consumption continues to grow but we are just now approaching the world average.
  • In B.C., sales of B.C. VQA wine still only represent less than 20% of all wine sold.
  • The Direct-to-Consumer (DTC) sales channel is the most profitable for B.C. wineries.
  • Selling more wine DTC vs. Government stores improves profitability & ultimately value for BC wineries

Participants also heard from Donald J.P. Ziraldo, C.M., BSc., LLD. Don is a founder of Canada’s wine industry, owner and operator of Ziraldo Estate Winery and an advisor to other wineries. Highlights of his presentation included:

  • B.C. VQA is the top premium selling wine category in the province with a market share of 19.3% and 80% of what is made in B.C. is consumed in the province.
  • The California premium-plus segment is making significant gains in the on and off premise and luxury wines have rebounded in the restaurant channel. These positive trends are occurring both with big-volume players and high-end specialists.

Jeff Gutsch, CPA, Tax/Business Consulting Partner, Moss Adams LLP also presented.

Jeff is a Wine Industry Group Leader for Moss Adams LLP, one of MNP’s partner firms in the U.S. The Moss Adams Wine Industry Group works with more than 200 wineries and vineyards in wine regions throughout California, Oregon and Washington. Jeff’s insights included:

  • Consumption of wine in the U.S. is at an all-time high and expected to rise to 3.78 gallons/person by 2025.
  • U.S. wine exports are at an all-time high of 50 million cases; imports shrank by 1% in 2011.

MNP’s Heather Weber, CGA, Indirect Tax Specialist, spoke about the transition to GST and PST from HST, covering points that included:

  • Direct shipping rules to determine the rate of tax are complicated and vary depending on whether you are selling goods or services. She provided a number of examples to illustrate this.
  • The rate of tax charged on wine sales depends on where the wine is delivered to the customer. For on-line sales, this means the rate of tax is dependent on who arranges the shipping – the winery or the customer.

Presentations were followed by questions from the audience and a lively discussion. Overall, the event provided interesting food for thought for the wine industry and those of us working to help it succeed.