Province’s new wine tax puts strain on local producers
Vintners must now pay 40% tax on grocery store wine sales
by Camilla Faragalli
Quebec
Feb. 5, 2024
Local wine producers are anxious a new provincial tax on the wine they sell in grocery stores will make that means of getting their product to market financially unsustainable.
As of Dec. 1, 2023, winemakers in Quebec are required to pay a 40.3 per cent remittance to the Société des alcohols de Quebec (SAQ) on every bottle of wine they sell in a grocery store or dépanneur.
Pavel Khol co-owns the Domaine de Pontiac Village Vineyard in Quyon with his wife, Maude-Emmanuelle Lambert.
He explained that with the considerable tax increase, making a profit in grocery stores would be nearly impossible.
“We do sell [to grocery stores] currently, but I’m not sure we will be able to continue,” Khol said.
“If I continue to sell in grocery stores and there’s no way to get this 40 per cent back somehow . . . I’ll be at a loss. It doesn’t impact what we sell here at the winery, but the outreach to more customers through grocery stores would be handicapped.”
Martin Dandenault co-owns Vignoble des Collines in Luskville with his wife, Lisanne Binette. He says that while correspondence he’s received from the SAQ would indicate that he can expect regular rebates, he’s not looking forward to the paperwork involved.
“The problem is more administration, and that’s frustrating. More work, but I don’t want to lose that aspect of our market. We need all of the percentages of the sales we can do,” he said.
According to Dandenault, roughly 25-30 per cent of his winery’s sales come from grocery stores.
“I don’t have any choice here,” he said. “But the SAQ didn’t have any choice [either], it’s a big-business obligation.”
THE EQUITY reached out to Quebec’s minister of economy regarding the kinds of rebates or other supports that might be coming for wine makers in the province but did not get a response before publication deadline.
The new wine tax, introduced in the spring of 2021 and implemented on Dec. 1 of last year, was created in order to settle a trade dispute with Australia.
Australia’s government announced in 2018 that it was initiating a formal World Trade Organization dispute settlement action against Canada’s discriminatory measures affecting Australian wine.
“The Quebec wine measures provide Quebec small-scale wine producers with direct access to grocery and convenience stores. The Quebec measures appear to streamline access in favour of Canadian wine, while maintaining barriers to access for imported wines,” Australia’s request for consultation stated at the time.
