A Few Provincial Wine Protectionist Thoughts

Ever so slowly people are starting to be able to order wines from wineries in other provinces.  BC is wide open for business, while Ontario still has restrictions, apparently, to their consumers.  I’m not going to go into each province and which wine they can and cannot purchase from other provinces.  There are other articles out there that have this covered.

What I would like to briefly talk about is one of the reasons I hear about why people should not be able to buy wines from wineries in other provinces.  And that reason is that the provincial government where the person lives, will not get their provincial sales tax added to the wine, so the province will be losing out on revenue.  From statistics that I read from the USA experience, 2% of wine sales are online, which doesn’t sound like a huge amount to me.

Who is Buying Wine Online?

If we look at the VQA wines that are for sale from wineries across Canada, I’d dare guess that most are in the $20 range or higher.  Juxtapose this with the statistic that the highest volume wines sold in Canada are around $15.  From this I am going to guess that these sub $20 wines are probably non-VQA and a fair number will not be produced in Canada.  There are many southern hemisphere wines that you can buy in your local liquor store that are sub $20 for example.

When purchasing a case of BC (or ON) VQA wine online I think most wineries ask for 6 or 12 bottle purchase.  These wines I think would not be what the general sub $20 bottle buyers want to purchase.  I think that the profile of the purchasers of these case and half cases would be people that have been to the winery before, possibly attend wine festivals and other wine events, and have a bit more disposable income.  I could be wrong, but I think I’m pretty close.  These $20+ wines would probably not ever be sold in a volume large enough for a provincial government liquor board to bring into their inventory, so no significant loss of income.

Selling Wine Online Creating More Revenue?

But here is another argument.  Maybe these wines that are ordered online, creates MORE revenue to the government coffers in other items taxed, plus grows the economy for the private sector.  What?  How can this be?

How are these wines shipped?  By courier.  The courier companies charge taxes for shipping, so there is tax revenue to the government, plus money to the courier companies, and wages to their employees.  I think that companies like AMAZON and EBAY with all their online retail are helping courier companies and Canada Post with their volume of packages sold, plus as I mentioned the taxes on all those items shipped.  Besides the couriers and Canada Post making money, there are all the other companies that make the boxes and packing materials to ship the wines.  Again there will be taxes paid for these materials as well.

So overall maybe opening up the provincial borders will do more net good to both the private and public sector, plus increase tax revenues.  It’s worth a try!