Spirits Canada appealing to rural communities

Spirits Canada’s rural tour campaign to support equity in grocery sales access is getting ‘spirited’ agriculture support.

“Many people don’t understand what it means to not see locally made spirits in a grocery store,” said Spirit Canada’s president and CEO, Jan Westcott.

“It’s not just that you can’t get a bottle of whiskey or vodka or rum or what have you. It’s impacting all of their suppliers as well.”

Why it matters: Limiting consumer access to spirits while increasing the reach of beer and wine could directly impact producers and agriculture businesses supplying grains for distilleries.

“(In Ontario) somewhere between 80,000 and 100,000 acres of corn goes into spirit production every year,” said Keith Currie, Canadian Federation of Agriculture president. “That is a huge economic development aspect to this industry that people aren’t talking about. If that corn doesn’t go into spirits, it’s going to go into the general market, and what’s that going to do the market?”

John Taylor, president and owner of Collingwood’s Collwest Grain, estimates 20 to 30 per cent of corn flowing through his facility supplies distilleries, including Collingwood whiskey.

“It’s an important market for our locally grown grain, an important part of our business, and we’d like to see spirits better marketed and given fair access in Ontario,” Taylor explained.

The spent distiller’s grain provides local farmers with high-protein animal feed, creating a circular economy highlighting the symbiotic relationship between spirit producers and agriculture.

“We’re an industry that’s attached at the hip with the farm community,” Westcott said during a presentation in Collingwood. “We’re very dependent on farmers to produce both the quantity and the quality of grain, and we’re very lucky in Ontario.”

Several commodity groups, including the Ontario Federation of Agriculture (OFA) and Grain Farmers of Ontario, support Spirits Canada’s endeavour to achieve consumer access parity in grocery stores.

Westcott said British Columbia and Quebec provide an impact roadmap between providing or denying consumers spirit product access in grocery stores. In under eight years, Quebec saw spirit sales cut by over half resulting in the closure of 11 distilleries when it excluded spirits from grocery sales in 1982. The industry never recovered.

When B.C. opened more off-licence sales, the provincial liquor board’s contribution to the government doubled and, much like Ontario, showed no discernable negative impact on liquor store sales.

“Ontario is the home of the distilled spirits business in Canada; all of our head offices are here,” said Westcott. “Our major production facilities are here; everything runs out of Ontario. If this (Quebec scenario) happens in Ontario, it’s going to kill the business.”

According to the LCBO 2021 annual report, spirits account for 48.3 per cent (approximately $1.8 billion) of total gross margin and generate more than $500 million in export sales in Ontario annually. Opening grocery sales of spirits and spirit-based coolers could increase provincial contributions by $200 million.

Locking them out could result in $400 million in lost revenue, especially as Ontario-made spirits collect twice the tax of beer and four times that of wine.

Westcott, with the full support of the Windsor council, has asked for a pilot project in that city.

Brewers and vineyards are producing more coolers than the spirit industry, again narrowing the spirit market’s ability to maintain its consumer base without parity in grocery store access.

“We have very robust support amongst the caucus and the cabinet,” said Westcott. “But we’re struggling to get the government to make a decision and do something to try and help this along.”

Instead, Westcott has taken his message to the people it most impacts — those in rural Ontario — to encourage communities to write to their MPs in support of bringing spirits and spirit coolers into grocery stores.

“How come we don’t get the same treatment in our own province where we’re producing, we’re employing and are using local materials?” he asked. “We don’t get the same opportunities as our competitors.”

Currie said typically, Ontario rye hasn’t traditionally been a significant crop for distilleries. However, new genetics, technology, varieties, and adaptive practices create an opportunity to grow a niche market.

“We’re the ones that have everything at stake here. We’re the primary production for this, and if it’s going to be distilled here, and we don’t grow it, it’s going to be brought in from somewhere else.”

As a Georgian Bay area farmer, he said local spirit production, craft beers and wine have evolved into the tourism industry and provided year-round employment for the area’s rural communities.

“The whole industry has tremendous opportunity through exposure,” Currie said. “That’s really what Spirits Canada is looking for in this argument; We just want the exposure; let the people decide what they want to do with it.”