Why winemakers worried about free trade with the U.S.

Posted : 09/24/2018

September 19, 2018

Thirty-one years ago, many winemakers across the country feared that free trade with the United States could drain away their livelihood.

That's because the coming free-trade deal would provide American winemakers greater access to the Canadian market — apparently at the request of U.S. President Ronald Reagan himself, according to recollections former International Trade Minister Pat Carney recently shared in a newspaper column.

In the fall of 1987, Fred Langan, a reporter with CBC's The Journal, looked at what was at stake for grape growers and winemakers when free trade came into effect.

Entering a world of free trade would put Canadian winemakers up against competition in California, where grapes of the same quality could be grown more cost-effectively. (The Journal/CBC Archives)

Langan reported that the Canadian wine industry had slowly been maturing over the years and embracing the use of higher-quality grapes to make its product.

"About 20 years ago, Canadians started to abandon homegrown wines and Canadian winemakers realized local grapes were no longer good enough," said Langan.

But free trade would put those same winemakers up against competition from California, where producers grew the same grapes at a lower cost and across a longer growing season.

"Until now provincial governments have taken away California's natural advantage by taxing foreign wines," Langan said, noting that would change under a free-trade deal.

'Tough competition' ahead

That was certainly a concern in Nova Scotia, where local winemakers were able to price their bottles at far less than U.S. competitors in the pre-free trade market.

Back then, the CBC's Phil Forgeron visited the Andrés wine plant in Truro, N.S., where the company produced about 40 per cent of the wine sold in the province.

"Because it has a plant in Nova Scotia, it gets preferential treatment at liquor commission stores," he reported, telling viewers that a free-trade deal would likely bring that to an end.

"American wine growers with lower labour and other costs could prove to be tough competition."

'The business is going to change'

In Ontario, Barnes Wines was already making use of some California-grown grapes in a bid to make a better product.

Jeff Ward, an executive with the company, told The Journal he did not believe there was much of a future for Canadian grapes.

"The business is going to change completely from anything we've known before," Ward said, predicting local grape-growers would struggle to find buyers for their produce.

'I don't know what they're going to do'

"I don't know what they're going to do with their grapes. We will have to buy California material to be competitive with Californian wines," he added. "And for the wineries, for us to exist, we may well become bottles of Californian wine."

The Journal also visited an estate winery in British Columbia, where Harry McWatters told Langan he believed it was possible to compete with California operations similar in scale to his own.

"There are major producers in California that obviously have some efficiencies that are going to be tough to compete with, but some of the small, quality producers I think we can compete with reasonably well," McWatters told The Journal.

'We produce some lousy wine'

Another challenge for Canadian winemakers was the poor reputation of their product — a hurdle Tony Aspler, a writer and well-known wine expert, believed would continue to be a problem in a free-trade market.

"We produce some lousy wine — so does France, so does Italy, so does Germany," he told The Journal. "And in fact, too many people drink labels rather than what's in the bottle."

However, Aspler said Canada was actually producing a lot of good wine that, if tested blind, would impress many imbibers.

But free trade was coming sooner rather than later — Canadians would see a full version of the deal by the end of 1987.

As the CBC's Wendy Mesley reported on The National that December, the final version of the free-trade deal was likely to please the American wine industry, as "the only place it won't be able to sell its product now will be in Quebec grocery stores."

In the end, some assistance was offered to the grape and wine industry in British Columbia and Ontario, as the shift to free trade with the United States rolled out.

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