Grape prices rise two per cent over five years

Tuesday, July 8, 2014

by SUSAN MANN

Grape growers are getting a two per cent price increase over two years as part of an agreement reached with wineries.

Debbie Zimmerman, CEO of Grape Growers of Ontario, says the agreement covers 18 varieties and the price increase is over this year and 2015.

Grape Growers, the Wine Council of Ontario and the Winery & Grower Alliance of Ontario were involved in the day-long negotiations July 2, which went on until 10:30 p.m., she says, noting growers aren’t jumping up and down “because everybody would love to get more but generally it has been a steady increase in grape pricing since 2009.”

The agreement also provides for an extension of the plateau-pricing framework for two years. Plateau pricing is a minimum price for grapes that are below an agreed level of sugar content. Zimmerman says this is an agreement that Grape Growers first worked out four years ago with processors for the four varieties “they often use to blend off their wines.” Those varieties include Riesling, Chardonnay, Cabernet Sauvignon and Cabernet Franc.
 
 “We came up with a very competitive pricing” for those varieties, she says, adding grapes are priced on a sugar schedule and “that sugar schedule is flat lined at the price of $1,200 per tonne for the white varieties and $1,300 per tonne for the reds.” This gives processors “an opportunity to buy within a window of sugar at a flat rate, so it’s not fluctuating up and down.”

The plateau pricing framework agreement means processors “can buy more at a fixed sugar schedule,” she explains.

There are about 520 grape growers across southwestern Ontario. The grape and wine industry contributes $3.3 billion to the Ontario economy along with providing 14,000 jobs. BF