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Sun., Oct. 4
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Leveling the winery field: U.S. lawmakers advocate repeal of Canadian wine tariffs


New Yorkers can hop across the Canadian border and bring back cases of wine while paying a nominal fee or no charge at all. Canadians, on the other hand, have made a habit of only sampling wine at vineyards here, not buying.

And it’s not because New York wines taste bad.

Costly tariffs on U.S. wine that Canadians take home have long been a sales deterrent in the north country, where a robust network of seven wineries has blossomed in the past decade.

To reverse that trend, U.S. lawmakers are trying to get Canada to repeal its tariffs, which can add anywhere from 58 percent to 150 percent to purchases. The duty means Canadians can be charged $15 for a $10 bottle of wine, more than the cost of the product itself. North country winemakers say they can sympathize with their Canadian visitors.

“They tell us in our tasting room, ‘Gee, I wish I could buy it and take it home,’ but they’ll only buy a bottle or two to drink while they’re here,” said Philip J. Randazzo, owner of Coyote Moon Vineyards in Clayton and president of the Thousand Islands-Seaway Wine Trail. He said sales among Canadians at the winery barely scratch the surface of the vineyard’s annual revenue.

In stark contrast, research shows that tasting rooms at wineries on the Niagara Wine Trail in Canada draw about 35 percent of their revenue from Americans, Mr. Randazzo said. He contends that repealing the tariffs would trigger a similar boom in business here. What’s more, the north country wine industry would have a large population in southern Ontario to tap.

“It could increase our sales by the same margin, which would be a huge step forward,” Mr. Randazzo said.

Radio and television advertisements for wineries here already are broadcast to Canadians, Mr. Randazzo said. “That advertising is now being wasted, but if the tariff is repealed, wineries would advertise more,” he said.

Rep. William L. Owens, D-Plattsburgh, has met with wine industry leaders in the north country and has spoken with Canadian lawmakers to try to develop a plan that will prompt Canada to discontinue its wine tax policy — a priority sought by the U.S. for years. But this time, U.S. lawmakers should have enough leverage with the Canadians to make a deal, he said.

This year, the U.S. has helped Canada become a participant in the Trans-Pacific Partnership talks in San Diego, Calif. The tariff policy will be on the table at those talks, Mr. Owens said, along with proposals to repeal other Canadian trade policies regarding taxes on dairy and poultry products.

“Joining these discussions is something they’ve asked for rather extensively and consistently, and this is where we may have the piece of leverage needed to eliminate the tariff policy,” he said.

Mr. Owens said the robust wine industry in the north country would benefit from the change in a big way.

“We see a tremendous amount of Canadians coming down all across the northern part of the district from Jefferson to Clinton counties,” he said. “We know that the winery industry would benefit from Canadians with an increase in sales, but we also think it would expand Canadian tourism generally,” because of the strong tourism economy.

Mr. Owens said he is optimistic the Canadian government will see the value of eliminating the wine tariffs. Although the current policy aims to safeguard Canada’s wine industry from U.S. competition, getting rid of the tariffs could help Canada create partnerships with the north country to make the regional economy stronger.

“The history of the relationship with the U.S. and Canada shows that when the economy is strong in one area, it helps the other because you create critical mass,” Mr. Owens said. “Customers that buy wine in upstate New York will also buy wine in south Ontario.”

That point also was made by Gary S. DeYoung, executive director of the 1000 Islands International Tourism Council, who said the north country could promote both sides of the border with a cooperative advertising campaign. Sixty percent of tourists who take day trips to the north country are Canadians, he pointed out. And they come here for the same reasons New Yorkers make the trip north.

“Canadians are taking short trips to shop and tour the wineries and museums,” Mr. DeYoung said. “Because we’re between halfway between Montreal and Toronto, we could advertise to both sides of the border for tourists to enjoy our winery tours and take some bottles home.”

Possible solutions to the tariff question, Mr. DeYoung said, might be to set a limit on the number of bottles Canadians can bring back without paying taxes, or to make allowances for products purchased at north country wineries.

“Perhaps (Canada) could give precedence to those types of wines, versus those with a mass label,” he said. “We’re trying to draw Canadians to our wineries, not to go to the liquor store across the border to get the best deal.”

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