11/08/2013 05:00 EST | Updated 01/23/2014 18:58 EST

European trade deal a chance for Canada's wine to shine

Brothers Allan and Brian Schmidt run one of Canada’s most beautiful wineries, the peaceful and picturesque Vineland Estates in Ontario’s Niagara region.

Their wine won several gold medals at an international competition this year. I couldn’t help but wonder if they were trembling in fear in their cellar, awaiting the flood of French or Italian wine that will pour into the marketplace, now that Canada has a new trade deal with the EU. Nope.

The reality? Not at all.

“We’re already at the highest level of competition that you can have,” Vineland president Allan tells me. “There haven’t been any trade barriers keeping wine out of our market for years now. I certainly don’t see this as a huge negative effect.”

Unlike Canada’s cheese-makers and fisheries who find themselves disadvantaged by the new deal, some in Canada’s wine industry are thrilled by the prospect of new customers. Just ask the president of the Canadian Vintners Association. “The agreement opens preferential market access to the EU’s more than 500 million consumers,” says Dan Paszkowski. “It creates new opportunities for Canadian wine exports to Europe.”

Paszkowski believes there’s not much of a threat to people like Vineland’s Allan and Brian Schmidt.

Canadian consumers won’t see any fabulous new bargains on imported wine. The savings under the new deal will be insignificant — a few pennies per bottle. That’s certainly not going to be enough to turn a wine aficionado’s head, or lure them away from buying a domestic wine.

Meanwhile on the other side of the deal, savings for Europeans who buy Canadian wine are bigger, but still not huge: a 45 cent price reduction on sparkling wine, 18 cents for still wine. Natalie MacLean sees huge potential for Canadian wine in Europe.

She’s the editor of . “We get more traffic than Ontario’s liquor board,” she boasts, “There are a lot of thirsty people out there!”

Growth opportunities

MacLean believes the beauty of wine is its diversity. “What we offer is different from what Europeans have now,” she says. “We specialize in cool climate wines and not just ice wine. Our riesling, pinotnoir, sparkling wines, our shiraz and cabernet franc — those are really big specialties for us both in Niagara and the Okanagan. The Europeans will be open to our wines.”

MacLean looks back to the NAFTA agreement and what it did to spur Canadian vintners to up their game. “We ripped up a lot of bad vines,” she says. “There was a higher drive to quality, and although our volume market share went down, we got a smaller piece of a much bigger pie. So our overall production went up, our quality went up, and the number of wineries skyrocketed, especially in BC and Niagara.”

She says CETA will benefit Canadian consumers also, since an open export market for fine Canadian wines will again be a driver for quality here at home.

And it’s the customers here in Canada that Allan Schmidt is most anxious to win over. Over 70 per cent of the wine sold in Canada is imported. Another 20 per cent is blended wines, the product of home-grown grapes along with foreign wines. Only 10 per cent is totally Canadian.

“We don’t own the market yet and until we do, it really doesn’t make sense to go after exports in a big way,” says Schmidt. He notes that in France, people mostly drink French wine, just as in Italy, they drink Italian wine. “The only reason Australian wines wines started showing up on Canadian shelves is because they had a surplus, and already owned 90 per cent of their market. So they looked outside for growth.”

Schmidt’s point about conquering the home market first is something we hear frequently on Dragons’ Den. Entrepreneurs often come to pitch for an investment to help them go after the U.S. market, and the Dragons will point out they shouldn’t necessarily look abroad while there’s still so much potential market share at home.

Chris Wyse runs the Burrowing Owl Winery in Oliver, British Columbia. He and his father are actually happy with demand at home, and are focusing on markets other than Europe.

“We have a good following in Canada,” he says. “We’d like to get a little more interest in the U.S. It’s our neighbour and we’re seeing traction in Asia. From the West coast, that seems to be more of a natural channel for us. Maybe it’s different in Ontario.”

Concerted effort

Turns out it’s not. Asia is where Ontario’s Vineland also sees the most potential. Allan Schmidt has been exporting to China for close to 10 years, and says demand has picked up in the last three years. “There’s a real hunger for western culture there, and they like the status symbol of purchasing higher quality wines.”

Both the wine-makers I spoke to, Wyse of BC’s Burrowing Owl and Schmidt of Ontario’s Vineland, made a point to say they’d love to exploit the market in Europe. But in their view, the one thing they’ll certainly need it marketing help.

Schmidt recommends a “Wines of Canada” promotional campaign to get a beachhead in Europe, since no individual winery would be able to make much of an impact on its own. We need to build more recognition as a wine-making country, and he’d like to see the government help finance such a campaign.

Good luck with that. The feds have just coughed up $280 million contribution to a new fishery fund that’s meant to offset the damage from the EU trade deal. And Canadian consumers may soon be lobbying for a break on the price of prescriptions drugs, since the deal could delay the arrival of generics by as much as a year.

I think I’ll echo the Dragons, and encourage all the Canadian wineries to woo us at home, before striking out for foreign markets.