Issue link: http://read.dmtmag.com/i/197178
DEBORAH PARKER WONG partner at Henry of Pelham Estate Winery in Ontario. "We can't stop people from making wines using these methods, but now they can't put the term icewine on the label." Growing demand for icewine in China has resulted in a rash of counterfeit products that are being passed off as authentic icewine. "We've identified counterfeit icewines in five-star restaurants and hotels," said Dan Paszkowski, who heads the Canadian Vintners Association. "Up until now, we've been vulnerable," added Speck, who said he believes that the new regulation will help combat those abuses. In terms of dollar value, icewine is Canada's main wine export, and more than 85% of it is made in Ontario. Bruce Nicholson, winemaker for Inniskillin, the country's largest producer, has been on the forefront of the push for regulation and welcomes federal laws that will protect the integrity of the wine. "A very specific standard was necessary because we had gaps in both our provincial and federal regulations," he said. "It's hard to go after other people unless you have your own house in order. We're now in a stronger position to enforce the definition globally." According to Paszkowski, Canada's exports of icewine reached $13.4 million CAD in 2011 and the category itself grew by 242% from 2004 to 2011. Canada and fellow WWTG members Argentina, Australia, Chile, Georgia, New Zealand, South Africa and the United States are working toward codify- Rhode Island Tax Hike Unlike the moving target that is direct shipping, the domestic excise tax landscape for wine remained almost unchanged in 2013. Although several states had tax increase proposals on the ballot, only Rhode Island's gained voter approval with legislation that was designed to be revenue-neutral. "Rhode Island increased its excise tax on wine from 60 cents to $1.40 a gallon for an experimental 16-month period and eliminated sales tax for the same period," said Steve Gross, vice president of Photo: Thinkstock state relations for California's Wine Institute. The rationale behind the legislation was based on package stores that were losing sales to neighboring Massachusetts, which w w w. v w m m e d i a.com doesn't impose a sales tax. Consumers were crossing the border to shop in Massachusetts and thus avoid paying sales tax in Rhode Island. "It's all a matter of perception," Gross said. "Eliminating sales tax encouraged shoppers to stay in the state t o m a k e p u rchases." Rhode I s l a n d 's n e w rates will sunset as of March 31, 2015, and legislators will have to act to continue them. Gross said legislators will take a wait-andsee approach to determine if the experiment is successful. H i s t o r i c a l l y, excise tax hikes for wine have been few and far between; during the past decade, only a handful of states have increased their excise tax rates. ing regulations in order to promote wine trade. Canada's new regulations will also allow for mandatory labeling information – name, net quantity, country of origin and alcohol content by volume – to be displayed in a single field of vision on wine bottles and boxes, which means that it can be seen without having to turn the container. "It's the consumer who wins in the end," Nicholson said. "Now we can focus our energy on promoting the product." Canadian wine exporters are gaining greater market access because they won't have to redesign their labels for each individual country's requirements. "We're now in a position to develop future export markets," said Paszkowski. "And Korea is first in line." New DTC Benchmark The value of direct-to-consumer (DTC) shipments from U.S. wineries has reached an all-time high. According to ShipCompliant's 2013 Direct Shipping Report, DTC sales have exceeded the total value of U.S. wine exports and continue to outpace the growth of overall wine sales in the nation. The 10% increase in sales of direct-shipped wines brought the value of shipments to $1.46 billion in 2012. Effective Oct. 1, 2013, Montana has a new permit law that allows any out-of-state winery registered in Montana to sell and ship up to 18 9-liter cases of wine to adults in that state each year. Wineries selling through a wholesaler will pay an annual fee of $50, and a tiered registration fee is in place for newly registered wineries. Montana wineries also benefit, as they now have the ability to ship directly to consumers in Montana. N ov - D ec 2013 | V INE YA RD & W INE RY M A N A G EM EN T 15