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A market that literally prohibits producers from adjusting their prices to meet demand is not a real market

Developing markets outside the province doesn’t offer much hope. In the U.S., all 50 states, even Alaska and Hawaii, are already subsidizing their own wine producers. And even good Ontario wines won’t exactly fly off the shelves when Americans can get excellent California wines at lower prices.

How about Europe? After all, the VQA (Vintners Quality Alliance) designation was invented over 30 years ago specifically so Ontario wines could break into the European markets. But Europe is awash in wine. Italians produce the most wine in the world, and you can pick up a drinkable bottle for two euros (but at the LCBO, it’ll cost you $12).

Forget the idea of Europe falling for Ontario chardonnays; ditto Australia and New Zealand. And South America, where Argentina and Chile are major world producers selling at cutthroat prices. Some top Ontario wines sell abroad but in small quantities. Any chance of competing outside our borders would require serious subsidies, something other countries won’t tolerate and Ontario taxpayers shouldn’t either.

With our own provinces keeping trade barriers in the way of alcohol sales, it’s still as hard to find many Ontario wines in B.C., Quebec or Nova Scotia as it is to find wines from those provinces in the LCBO.

That leaves Ontario as the only real market with any possibility of growth. But while Ontario producers have some freedom to market to consumers online and directly to restaurants, the LCBO controls the most important marketing lever — price. It’s against the law to sell wine below LCBO’s floor pricing, regardless of where wine is sold in the province. That’s the crux of the matter: a market that literally prohibits producers from adjusting their prices to meet demand isn’t a real market. And while Ontario producers make excellent wines, they can never grow like other, real businesses until they’re freed from pointless government price controls. Spending more money pretending to find new markets might create a few more government jobs, but it won’t give Ontario’s winemakers what they really need: Freedom from the province’s flawed, inefficient and obsolete system.

Patrick Luciani is senior fellow at the Atlantic Institute for Market Studies