The Ontario Wine Industry

Introduction

There is a saying that in wine there is truth. Twenty years ago, the truth about Canadian wines was that they were barely palatable. Then, Europe collectively looked down its nose at Canada's wines. Today, nothing could be further from the truth.

Canadian wines are fast gaining a reputation for quality and taste throughout the world. A fine example of this change is the widespread belief that Canadians have surpassed the Germans in the art of making ice wine.

In part, the success of Canada's wine industry can be attributed to the skills of wine authorities like today's guest speaker, Tony Aspler.

Since 1964, Mr. Aspler has been active in the international wine world. He studied his art at the grants of St. James Wine School in London, England, where he passed with distinction. Since 1980, he has been the wine columnist for The Toronto Star, and is probably the most widely read wine writer in Canada.

Before I sat down to write my introduction, I asked a friend if he had ever heard Mr. Aspler speak. My friend said yes. When I asked him what he was like my friend replied: "Dry, very dry."

Oh well, we bankers never have been known for our sense of humour.

All punning aside, as a consultant and a judge who frequents European vineyards and wine fairs, Mr. Aspler is regarded as the leading authority on Canadian wines. In addition, he is a prolific writer of mysteries, with several novels and anthologies to his credit.

Today, he will be speaking about the Canadian wine industry and his most recent book called Vintage Canada 1992. Please join me in welcoming our distinguished guest.

Tony Aspler

Good afternoon, President, ladies and gentlemen. First, I would like to thank The Empire Club for inviting me to talk about Ontario wine. As a 20-year critic of the industry, I can't wait to hear what I have to say.

I recall when Michael Broadbent, the Master of Wine, addressed The Empire Club some years ago he said he felt naked standing up here talking about wine without a glass in his hand. I guess all wine people feel the same way. Which puts me in mind of that old Country and Western classic: "Td rather have a bottle in front of me, than a frontal lobotomy."

When I began writing about wine in 1975, the term Ontario wine was an oxymoron. You may remember Ontario wines then were mainly enjoyed by gentlemen who did most of their entertaining standing up in doorways, drinking out of brown paper decanters.

The Ontario products they favoured were sweet, highly-alcoholic beverages. Along Parliament Street they were known as "block and tackle wines." You drank a bottle, walked a block and you could tackle anyone.

Come alive for a dollar five. Remember that?

How times have changed. Ontario wines are winning gold medals in international competitions and restaurateurs of the finest dining rooms in our city are urging their clientele to try Ontario Chardonnays. But there are pockets of resistance.

Some very nice people still suffer from Niagraphobia. The symptoms are a morbid fear of being caught serving Ontario wines, buying French products whatever the cost and using the local product for cooking so that your guests won't see the label.

Yet Ontario wines have now become the Cinderella of the wine world.

What caused this amazing turnaround in the perception of our wines? I believe the principal reasons, and I will develop this theme in a moment, are two acrimonious acronyms, and try saying that after a couple of glasses of wine--FTA and GATT, the Free Trade Agreement and the General Agreement on Trade and Tarriffs--which together helped to generate another acronym, VQA, the Vintners Quality Alliance.

VQA is an appellation system for Ontario wines similar to the Appellation Controlee laws in France or the DOC laws in Italy. Every wine-growing country has its own wine laws. These are regulations governing geographical limitations, grape-growing, natural sugar levels, production methods, quality standards, etc.

The VQA was put in place for the 1988 vintage and it was then that the Ontario wine industry began to show its true potential. To give you an idea of how the consuming public has responded, sales of VQA wines in 1992 rose 72 per cent over the previous year. In dollar terms that's sales of $26 million.

I got this figure, incidentally, from The Financial Post. The writer made a felicitous error in calling VQA the Vintners Quality Assurance, rather than the Vintners Quality Alliance. I prefer that. It sounds more like a bank than an insurance company.

VQA on a bottle of Ontario wine means that 100 per cent of the grapes were grown in one of three designated viticultural areas: Niagara Peninsula, Lake Erie North Shore, and Pelee Island. In broad outline, it means that authorized grapes have reached a certain degree of ripeness and that the wines have been tasted by an expert panel for typicity and quality.

Who among you has never tasted a VQA wine? Who hasn't tasted one since breakfast? In order to show you how far the industry has come, Td like to take you back in history. The industry, believe it or not, began in Mississauga. Actually, it was called Cooksville then.

The acknowledged father of Canadian wine was a German corporal named Johann Schiller who was given land for his military service. Schiller had experience in winemaking in the Rhine Valley. Near his house on North Dundas Street was the Credit River, and along its banks Schiller found wild grapes growing.

These were labrusca grapes, the native North American vines. Keep that name in mind because that species is the Ben Johnson of Canadian wine.

Schiller domesticated these grapes in his own vineyard and began to make wine which he sold to his neighbours. The next notable character in Ontario wine was Count Justin de Courtenay, a Frenchman who began his winemaking in Quebec.

He was the first wine lobbyist. In 1863 de Courtenay sent two bottles of his wine to the Premier of Lower Canada. The wine was tasted by a government consultant who pronounced it sour. De Courtenay, in the tradition of winemakers everywhere, sent back a blistering reply saying that all it needed was bottle age.

De Courtenay was so disgusted by the way his wine was received he moved to Upper Canada and bought Johann Schiller's property the next year. And three years later, in the year of Confederation, we find him sending his wines off to the Paris Exposition.

Will he never learn? But surprise, surprise, the wine was well received. Only in Canada, you say. Pity. The tasters at the Paris exposition found de Courtenay's wine to have some resemblance to Beaujolais. In reporting the event, The Toronto Leader wrote on July 8, 1867:

The time will come, we hope and verily believe, when grape-growing and winemaking will be one of the principal employments of our population; and when it does come, the cause of temperance will be advanced to a degree which could be reached by no other process.

Ontario had a flourishing grape-growing industry long before de Courtenay arrived on the scene. If you had been around in 1857 you could have read a letter in the Canadian Agriculturalist from a farmer, John Kilborn, who wrote that "four or five barrels of wine were grown from a single vine in the Township of Grimsby."

These days a vine will produce a bottle or maybe a litre of wine. But four or five barrels! The vine in question had an estimated 1,200 clusters of grapes. The wine tasted like port, apparently. A little bunch thinning might have helped.

In that year, 1857, a certain George Adams planted what would become Canada's first commercial vineyard. It was on a farm that originally belonged to Laura Secord's brother-in-law, Maj. David Secord.

The next significant date was 1866 when we see the first occurrence of Free Trade in the wine industry: Three gentlemen farmers from Kentucky bought 20 acres of Pelee Island, planted a vineyard and created a winery there called Vin Villa.

Eventually they marketed their wines through a Brantford grocer, Maj. J. S. Hamilton. Hamilton asked Vin Villa to produce a communion wine which he labelled as St. Augustine. Eventually, like Victor Kiam, he bought the company in 1909. Forty years later the Hamilton company was sold to London Wines and, today, London Wines still produces St. Augustine communion wine.

In 1873 Georges Barnes opened Barnes Winery. The next year Thomas Bright and his partner, F. A. Shirriff, opened a winery in Toronto. They called it the Niagara Falls Wine Company and 16 years later that's where they moved. In 1911 they changed the name to T. G. Bright and Co. Today, Brights is Canada's largest winery and the seventh largest in North America.

In 1916, half way through the First World War, the government of Sir William Hearst brought in the Ontario Temperance Act. All bars, clubs and liquor stores were to be closed for the duration of the war. In 1916 and 1917, all but one of the provinces went dry. Quebec held out until 1919.

The Women's Temperance Union had triumphed. But not for long. They hadn't reckoned with the power of the Ontario farmers. The grape-growers pressured the government so hard that Ontario wines were exempted from the act.

When Prohibition came in there were 10 licensed wineries. Each winery was allowed one store outlet only and that had to be on its premises. The public could only buy five gallons or two cases at a time.

Since wine was legal and distilled spirits and beer were not, wineries began to spring up all over the province. Between 1917 and 1927, when the Liquor Control Board of Ontario was founded, no fewer than 57 licences for new wineries were issued.

There were wineries in Fort William, Port Arthur, Kitchener, Belleville, Sudbury and Toronto. There were two kosher wineries in Toronto, one of which was started by Rabbi Jacob Gordon at his home at 116 Beverley Street. He manufactured Passover wine in his basement. In 1928 his company was sold to the Oporto Wine Company on the Danforth who in turn were bought out in 1978 by Chateau-Gai.

During Prohibition there were no quality controls on winemaking. A lot of wine was the oenological equivalent of rot-gut gin. But that didn't stop people imbibing. It was Prohibition more than anything else that turned Canadians into a nation of wine drinkers.

During 1920 to 1921, Canada consumed 222,000 gallons of domestic wine. Ten years later, the figure was 2.2 million gallons--and that was for Ontario alone! Eight out of 10 bottles were red port, 20 per cent alcohol, very sweet and made from the labrusca variety, Concord.

When Prohibition ended in 1927, some sort of control of the sale and distribution of beverage alcohol had to be put in place. The LCBO was born. Viable companies like Brights and Jordan, encouraged by the Ontario government, began to buy up the licences of the small operators. This way the number of wineries was reduced from 51 to eight.

Let's fast-forward to the next major development in the industry. The year is 1974. A young Italian nurseryman and a former Austrian seminary student decide that they can make better wines than the labrusca-based confections they bought at the LCBO. They have applied to Gen. Kitching, Chairman of the LCBO, for a licence to start Ontario's first estate winery. The licence is granted and Donald Ziraldo and Karl Kaiser founded Inniskillin Wines.

This precedent allows Paul Bosc to leave Chateau-Gai and create Chateau des Charmes. Joe Pohorly opens Newark, now Hillebrand Estates, and Pelee Island and Colio are born. The first wave of Ontario's small wineries has happened.

But the new winemakers wanted to use the noble European grape varieties such as Chardonnay, Riesling, Gewurztraminer, Gamay. They dreamed of making Pinot Noir that tasted like Burgundy, Cabernet Sauvignon and Merlot that tasted like claret, and sparkling wines that tasted like Champagne.

They were not interested in the labrusca varieties, Concord and Niagara, that had been the staple grapes of the Ontario wine industry for over 100 years.

Wines made from labrusca grapes smell as if you've left your dog out in the rain. Frankly, I would rather drink the glue they use to stick on the label than a bottle of labrusca wine.

More enterprising Ontario growers began to pull out their labrusca vines and plant Chardonnay and Riesling, and eventually, Cabernet Sauvignon and Merlot to meet the demands of the winemakers. The quality revolution was slowly beginning to happen. But these new wines were a tiny proportion of what was being produced by the major wineries at the time.

Then we had the second wave of estate wineries: Rief, Vineland Estates, Cave Spring, Konzelmann, Stoney Ridge, Henry of Pelham. And most recently the emergence of farmgate wineries--growers who decided to make their own wines--Marynissen Estate, Lakeview Cellars, Hemder Estate. With the advent of these small farmgate wineries the industry returned to its roots, back to the days of Johann Schiller and Justin de Courtenay.

In 1982 I wrote a book on the Canadian wine industry as a whole. I tasted over 600 wines and wrote notes on them all. I admit now I was charitable in my assessment, hoping to encourage the winemakers to produce better wines.

Last year I came back to the subject with a book entitled Vintage Canada. The difference between the wines then and the wines now is like night and day. First of all, the labrusca varieties have been banished from table wines. French hybrids such as Seyval Blanc, Vidal, Marechal Foch and Bach Noir make the basic table wines and blends. These are good value and eminently drinkable. But a wine region is measured on the quality of its noble varieties--the style of wines you find in France and Germany. And today Ontario wines can stand next to the wines of Europe without a blush.

And now I come back to my theme--the success of VQA. Ironically, it was the combined forces of free trade and the GATT that gave Ontario wines the impetus to compete with European and New World imports. The FTA and pressure from European winemakers finally forced the Ontario government to eliminate markups on imported wines.

With the gradual phasing out of preferential markups, Ontario wines had to appeal to the consuming public on taste rather than price. To sweeten the pill for the industry, two levels of government soothed disgruntled grape growers with a $100-million program.

This money went to uproot undesired varieties and subsidize grape prices against the cost of cheaper American gapes.

Of this sum $5 million was earmarked for a three-year promotional program. The wineries got their own assistance program funded by the Ontario Development Corporation$45 million for "wine enhancement and image."

The injection of taxpayers' dollars was a great help, but there was also the stumbling block of consumer resistance. How was the wine industry going to convince the wine-drinking public who remembered Baby Duck that their products were now on a par with the table wines of Europe, California, Australia and South America? The answer turned out to be the institution in 1988 of the Vintners Quality Alliance.

These regulations helped to raise the image of Ontario products, an image that was further reinforced by an aggressive TV and print ad campaign. The message came through loud and clear because leading restaurants are beginning to list Ontario wines and even hotel and restaurant chains are getting in on the act.

In June an Ontario-wide Wine and Dine promotion will further underscore the notion that the hospitality industry has embraced Niagara's finest after years of amused denigration.

The result of this sudden attention paid to Ontario wines has been an upsurge of their sales in an otherwise depressed market. While imported table wines were down 1.1 per cent for the calendar year ending November 1992, Canadian wines (virtually all from Ontario apart from a few BC labels, one from Quebec and the occasional Nova Scotia product in Vintages) were up 7.2 per cent.

More astonishingly, wines that carry the VQA appellation--which is currently only six per cent of Ontario production--rose spectacularly. In two years LCBO sales of VQA wines have gone up by 53.3 per cent, from 520,800 litres to 1,065,700 litres. These figures do not include VQA wines sold in the wineries' own stores, which account for over half as much again.

The unexpected profitability of Ontario wines has drawn the attention of entrepreneurs who may have never farmed in their lives. Currently there are 11 applications for wineries at the Liquor Licensing Board. Two of them are grape growers in Niagara, one is a cidery near Collingwood, and eight are from potential blending operations far removed from the wine fields of Niagara.

And herein lies the dilemma of the industry. Are they making Ontario wine under VQA regulations or are they bottling imported wine?

Under The Wine Content Act of September 1, 1988, a winery can blend up to 75 per cent imported wine with 25 per cent Ontario wine. This allowed companies to set up as wineries without vineyards. Importers of grape juice began to set up as full-fledged wineries. Their success has encouraged other juice operators to become vintners.

Peter Gamble, Director of the VQA, refers to these wineries as "manufacturing plants" which have little to do with the history and roots of the industry since they have no agricultural base.

Donald Ziraldo of Inniskillin is even more emphatic: "I'm very concerned about the proliferation of all these pseudo wineries. There's going to come a time when we're going to grow up like Napa Valley. If you grow grapes in Napa Valley you only make Napa Valley wine. I think we should propose to the government that new licences be granted to wineries only if they're using Ontario grapes."

Inniskillin has recently entered into a merchandising agreement with Cartier Wines & Beverages. This kind of consolidation is the next step for the industry.

Consolidation may be the future but for the moment everyone is jumping on the Ontario wine bandwagon. The greatest irony of all is that not since Prohibition have there been so many winery start-ups in the province. Bereft of its protective tariffs, the wine industry in Canada now has to go head to head with the rest of the wine world.

There is no question that the Ontario wine industry has established itself. Ontario Icewine will become a wine as sought after as Chateau d'Yquem. Ontario Chardonnays and Rieslings will be compared to Chablis, Pouilly-Fuisse and Puligny-Montrachet, and the Pinot Noirs will be an alternative to expensive red Burgundy.

The industry has nowhere to go but up. It has a new confidence and a new vision. The world will soon discover Ontario wines. I hope that Canadians will do so before that happens.

In conclusion, I would like to say that there is a new mood of Prohibitionism that is sweeping the province. Last year Metro Council voted in the proposition that alcohol is the leading drug and that fetal alcohol syndrome warnings must be displayed in all licensed premises.

This is an issue for another talk. I will only say that history has shown you cannot control abuse by attempting to control the substance.

Thank you very much.

The appreciation of the meeting was expressed by J. A. William Whiteacre, Q.C., Honorary Secretary, World Council of Management, International Wine & Food Society, and Honorary Solicitor, The Empire Club of Canada.