PENTICTON – Following this year’s devastating loss of grapes, B.C. wineries will benefit from temporary support that will allow B.C. wines to be made with grapes and grape juice from outside of the province for the 2024 vintage year.

This temporary measure is designed to help wineries produce a 2024 vintage. It will support job security within the industry and ensures the continued availability of B.C.-produced wines.

“B.C. wine growers and wineries are an integral part of the province’s economy and this year they have been hit by devastating losses due to extreme weather events,” said Mike Farnworth, Minister of Public Safety and Solicitor General. “By extending this support, we are providing badly needed help for our wineries during this challenging period. This relief for the 2024 vintage is essential to protect jobs and maintain the cultural and economic vitality this sector brings to our communities.”

The devastating loss of grapes and damage to vines due to freezing weather, and other climate-related disasters such as wildfires has resulted in growing uncertainty for the industry. Without intervention in response to the January 2024 deep freeze, many wineries have said they face substantial financial losses and possible cuts to thousands of direct and indirect jobs, including the loss of highly specialized wine makers and cellar masters whose expertise is integral to the industry.

This targeted support will offer wineries the option to address costs associated with importing grapes and grape juice in relation to producing B.C. wine. This will allow B.C. wineries to plan for the production of a 2024 replacement vintage, retain jobs and contribute to the province’s tourism sector.

“Our government is committed to supporting the long-term sustainability and strength of B.C.’s world-class wine industry,” said Roly Russell, Parliamentary Secretary for Rural Development. “We know what a difficult time it has been. These supports for the sector will help give our wineries the certainty to plan for this year’s wine production and continue delivering the enormous value they contribute to B.C.’s economy.”

These supports will take effect April 1, 2025, and remain until March 31, 2026. More information on eligibility and related requirements will be provided to the industry in fall 2024. This will give affected wineries financial certainty if they choose to enter into contracts now, source non-B.C. grapes and grape juice, retain jobs and skilled resources in B.C., and plan for production of a 2024 replacement vintage.

Quotes:

Miles Prodan, president and CEO, Wine Growers British Columbia –

“Just over 100 days ago, we received the final report that confirmed last winter’s freeze event decimated the potential of this fall’s vintage and threatened the viability of not just the B.C. wine industry, but also regional tourism, hospitality and accommodation sectors that are so critical to our economy. We’d like to thank the Premier, Minister Farnworth and our local MLAs for responding so quickly with today’s announcement and giving B.C. wine growers the confidence to plan for the day when they can return to 100% BC VQA wines and the assurance that this critical industry will continue for years to come.”

Paul Sawler, board chair, Wine Growers British Columbia –

“This is welcome news for the B.C. wine industry. The B.C. wine industry’s economic impact extends well beyond our cellar doors impacting construction, education, hospitality and tourism. This regulatory change expands the options for B.C.’s wineries, most of which are small, family-owned operations, to survive the impacts of these past few years and ensure living-wage jobs and the future economic vitality for our rural communities.”

Quick Facts:

• The wine industry generates approximately $3.75 billion annually for B.C. and employs more than 14,000 full-time workers.
• There are approximately 350 licensed grape wine wineries in British Columbia as of June 2024.
• Each year, B.C.’s wineries welcome nearly 1.2 million visitors.
• This vibrant industry generates revenue for government directly through sales and indirectly by providing jobs throughout the supply chain and in related sectors such as agriculture, tourism and hospitality.

A backgrounder follows.

British Columbia is home to a world-renowned wine industry that generates $3.75 billion annually and employs approximately 14,000 full-time workers.

Revenues generated by the industry include both direct wine sales and indirect revenue for businesses that rely on wine-related tourism. The industry creates jobs throughout the supply chain such as grape crushers, wine makers and bottlers, as well as jobs in related sectors like agriculture, tourism and hospitality.

As of June 2024, there were approximately 350 licensed grape-wine wineries in British Columbia. Each year, these wineries welcome more than 1,191,500 visitors.

Producing and selling wine in B.C.

B.C. liquor manufacturers must be licensed by the Liquor and Cannabis Regulation Branch (LCRB) and enter into a sales agreement with the BC Liquor Distribution Branch (LDB) to produce and sell alcohol in B.C.

The sales agreement authorizes the manufacturer to sell and distribute its products, and provides requirements relating to reporting sales, making payments and maintaining records.

The LDB’s winery sales agreements also enable government to further policy objectives, such as:

• promoting the use of B.C. agricultural inputs;
• supporting agri-tourism, encouraging the growth of small B.C. businesses; and
• fostering employment and economic activity.

For example, to produce BC Vinters Quality Alliance (VQA) and 100% B.C. grape wine, and receive benefits associated with LDB sales agreements (e.g., ability to direct deliver to hospitality and retail customers), B.C. wineries meet strict criteria in alignment with government policy, which drives significant investment, use of local inputs and support for agri-tourism.

In 2023, B.C. wines accounted for 45.1% of the market share in wine sales in the province.

Challenges faced by the industry

The wine industry in B.C. has recently experienced several compounding challenges, such as:

• multiple climate-related events adversely affecting production and tourism;
• supply chain disruptions; and
• inflationary pressures.

In January 2024, a particularly devastating event for the industry occurred when temperatures in the Okanagan-Similkameen region dropped below -20 C for several days. The wine industry estimates the deep-freeze event severely damaged or destroyed as much as 15% of grape vines and resulted in the loss of 90% of grape production.

As a result of this unprecedented event, there are significant concerns from affected wineries that limited grape availability will greatly impact production of a 2024 vintage and reduce the availability of B.C. wines starting in 2025.

To date, the Province has taken significant steps to mitigate the challenges faced by the wine industry, including:

• permitting land-based wineries to apply for a temporary exemption from the requirement in their LDB sales agreement to source 25% of their agricultural inputs from their owned or leased land; 
• permitting wineries to apply to the LCRB for temporary waivers to the 4,500-litre minimum annual production requirement for annual licence renewals; and
• providing industry with $26 million for grape replant programs and $92.6 million in Production Insurance and AgriStability payments through the Ministry of Agriculture and Food; and
• launching a B.C. wine-grape-sector task force to support long-term crop resiliency.

Recognizing the particular risk posed to B.C.’s wine industry by the catastrophic loss of the 2024 vintage and ripple effects to ancillary sectors, the Province has been exploring options to support wineries affected by the significant grape shortage within the current fiscal landscape.