Province needs new cider house rules
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.