As a constituent in this riding, I am writing to you to express my support for Ontario Craft Cider. I am a proud supporter and consumer of Ontario Craft Ciders and I am concerned for their long-term sustainability.
Ontario Craft Cider is produced in all regions of Southern Ontario and Ontario is one of the leading apple producers in North America. Naturally, the Ontario Craft Cider sector has an opportunity to become a premier producer, exporter, and driver of tourism for Ontario’s economy, but Ontario Craft Cider needs your help.
Ontario has benefited from an explosion in the craft alcohol sector with the proliferation of craft breweries across Ontario. This explosion brought with it growth, jobs, and increased tax revenue. Cider has the potential to be even bigger because, distinct from breweries, Ontario Craft Cider uses only domestic, 100% Ontario grown apples, and Ontario has the advantage to leverage this opportunity relationship to become a world leader in cider production while providing a boon to our agriculture sector.
Ontario Craft Cider is at a distinct disadvantage compared to all other categories in the beverage alcohol sector. Ontario Craft Cider is grouped into the Ontario Wine Act, which has stagnated its growth. Not only that, but a can of cider, which retails for approximately $3.35 a can, similar retail to a can of Ontario Craft beer, is taxed the same as an import bottle of wine versus being taxed the same as a VQA bottle of wine and receiving the taxation benefits that a VQA wine receives under the Ontario Wine Act. Beer is taxed at the lowest tax rate at roughly half that of cider while beer and cider have similar retail prices. This taxation discrepancy is unsustainable for Ontario Craft Ciders. When you compare apples to barley, Ontario grown and produced cider is nearly 4-5 times more expensive to produce than beer and taxed at twice the rate of comparable products. While beer enjoys cheaper foreign imported ingredients, lower tax rates, and better retail markups, Ontario Craft Cider is struggling despite overt market successes. Beer aside, Ontario wine costs more on the shelf because it can compete at $15 a bottle. Compared to Ontario Craft Cider that is more than a five-fold increase when comparing ml to ml between what cider commands at market and what wine commands at market, all the while the cost to produce cider and wine in Ontario are almost identical.
That is why I am calling on you to commit to establishing an Ontario Cider Act and to review and establish equitable taxation on Ontario Craft Cider so that it may have a chance in Ontario’s plan for recovery, economic growth, job creation, and prosperity.
Thank you, I look forward to receiving a response from you.