Prov­ince needs new cider house rules

The Hamilton Spectator - - OPINION - Ch­eryl Stepan

There are a grow­ing num­ber of cider pro­duc­ers pop­ping up in our re­gion. But chances are, you’re not as fa­mil­iar with them as you should be. That’s be­cause cum­ber­some govern­ment reg­u­la­tions make it too chal­leng­ing for some to get their prod­uct onto LCBO shelves.

As we de­tailed in a July is­sue of Hamil­ton Busi­ness, On­tario’s en­tire craft cider in­dus­try is ex­plod­ing — sales rose by an av­er­age of 89 per cent per year from 2011 to 2015. Cider is the fastest-grow­ing prod­uct at the LCBO. The in­dus­try has huge po­ten­tial to ex­pand even fur­ther — if only the pro­vin­cial govern­ment would help it along.

Here’s the prob­lem: cider is reg­u­lated like craft beer and a wine, though it is nei­ther. It can­not ben­e­fit from any of the perks the govern­ment af­fords On­tario winer­ies and craft brew­eries. The cider in­dus­try is work­ing with the pro­vin­cial govern­ment to change that. While some steps have been taken — such as al­low­ing cider to be sold in gro­cery stores along­side beer — there is more work to be done to level the play­ing field.

As The Spec­ta­tor’s Natalie Paddon re­ported, cider pro­duc­ers are li­censed as winer­ies, so they can’t get the break on markups avail­able to craft beer pro­duc­ers — a break of about 30 per cent. But be­cause cider is not made from grapes, it’s not ac­tu­ally con­sid­ered a wine ei­ther, so pro­duc­ers can’t take ad­van­tage of the VQA pro­gram, which al­lows them to get a re­bate from their sales too. This means On­tario craft cider pro­duc­ers have to pay the full markup to the LCBO, which can be as much as 56 per cent of the sale price. Dis­tri­bu­tion is a prob­lem too: Cider sales are lim­ited by the “win­ery” des­ig­na­tion — it can only be sold at LCBO stores, se­lect gro­cery stores, li­censees (such as restau­rants) or winer­ies — but only if they have five acres of ap­ple or­chards.

These non­sen­si­cal rules mean lo­cal op­tions like Revel Cider and West Av­enue Cider of Stoney Creek are only avail­able in bars and restau­rants. And a busi­ness like Tawse Win­ery, which added cider to its of­fer­ings this year, does not bother sell­ing in re­tail stores de­spite hav­ing well-es­tab­lished dis­tri­bu­tion chan­nels.

Why does any of this mat­ter? Be­cause these are lo­cal busi­nesses em­ploy­ing lo­cal peo­ple us­ing lo­cal prod­ucts. They are run by en­tre­pre­neur­ial peo­ple with a stake in our econ­omy. And they gen­er­ate taxes — ac­cord­ing to the On­tario Craft Cider As­so­ci­a­tion, the in­dus­try projects sales of $35 mil­lion by 2018, gen­er­at­ing $2 mil­lion in tax dol­lars.

Given the grow­ing con­sumer con­scious­ness around shop­ping lo­cal, it makes sense to en­sure lo­cal prod­ucts are as read­ily avail­able as im­ported ones. Ac­cord­ing to the cider as­so­ci­a­tion, 77 per cent of cider sold is im­ported — only eight per cent is from On­tario. What a shame.

The pro­vin­cial govern­ment needs to pro­mote a lo­cal in­dus­try that has the power to cre­ate em­ploy­ment, gen­er­ate taxes and put On­tario prod­ucts on the map.

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