Article content continued

Caroline Granger, founder of The Grange winery in Prince Edward County, is one of them. She produces about 8,000 cases a year. She sells about 3,000 through her on-site store in a refurbished barn in the heart of the county. Another 3,000 head to the Liquor Control Board of Ontario, 1,200 to restaurants and 800 to other provincial markets.

The LCBO, Granger says, has done a great job of marketing Ontario wine and educating its staff about provincial wine regions. But the cost of doing business through the LCBO is high and selling to grocers could prove even more costly.

“It was part of the reason why I decided not to put any wines forward to be eligible for grocery,” Granger said. “I’m not sure that all wines will be as well served in grocery.”

[np_storybar title=”What a winery makes off a $20 bottle in the LCBO” link=””]

Retail price: $20

LCBO mark-up, taxes, HST and environmental fees (54 per cent of costs): $10:80

Gross sales:$9.20

Less cost to produce a bottle:$5 to $7

Per bottle profit: $4.20 to $2.20

But even that profit can go quickly if producers have a bad year that cuts production, they need to buy new equipment or want to expand their offerings.

(All figures based on LCBO pricing documents and verified with Wine Council of Ontario figures).

[/np_storybar]

The LCBO will remain the wholesaler of record in Ontario, even when grocers sell it. However, wineries will have no control over where their bottles are sold. So, unlike in LCBO outlets, wineries won’t know where their product is going or selling.