Growers and wineries set grape price for 2010 and beyond

Thursday, July 8, 2010

by KRISTIAN PARTINGTON
After 18 months of negotiations a tentative two-year agreement has been reached by all major players in the Ontario Wine Industry detailing a comprehensive pricing structure for Ontario grapes.

The pricing structure was arranged between the Grape Growers of Ontario, the Winery and Growers Alliance of Ontario and the Wine Council of Ontario and it solidifies a one per cent increase in price for white grape varieties in 2010 over the 2009 vintage with the potential for an additional one per cent increase in 2011. Furthermore, for the first time in history there will be a Plateau Pricing Model in 2010 that recognizes higher quality in four main grape varieties: Chardonnay, Riesling, Cabernet Sauvignon and Cabernet Franc.

Under the Plateau Pricing Model, which is running as a pilot project in 2010 with the potential for extension to 2011, there will be a minimum base price for grapes within a lower sugar content (brix) range with increased premiums set for grapes of a higher brix content.

“What we’ve done is flat-lined the sugar scale at the lower end and steepened it at the higher end,” says Grape Growers of Ontario CEO Debbie Zimmerman.
She says this model allows Ontario wineries that might otherwise pay lower prices for product from other jurisdictions to compete with international brands while purchasing Ontario grapes. Last year, as an example, there was a surplus of Ontario grapes at the lower end of the brix scale and many growers had no opportunity to market these crops.

“The intent of the plateau pricing was to create that opportunity for those companies to access those grapes at a lower price…because our concern is always moving those crops,” says Zimmerman.

For Anthony Bristow, Chair of the Winery and Growers Alliance and Peller Estates Chief Operating Officer, this agreement illustrates a collaborative approach between growers and wineries towards the sustainability of the Ontario wine industry.

“It’s critical,” says Bristow of the agreement, “but even more so it’s critical that we make two years,” referencing the fact that this is a tentative agreement. “I think it’s going to be a true statement to our industry that we can work together.” BF