Asia will continue to be the driving force for Canadian wine exports despite the upcoming Canada-EU free trade deal opening up European markets for Canadian wine producers, according to industry experts.

While the United States remains the largest market for Canadian wine exports, China is now in second place and imports almost as much. The Chinese more than tripled their imports of Canadian wine between 2009 and 2012, and the demand continues to grow.

“Just because of this agreement, there’s not a great benefit to export to Europe. If you go to France, you’ll see 95 per cent of the wine in France is French wine,” said Duncan Gibson, director of finance at the Wine Council of Ontario.

“[Asia] is where a lot of our people concentrate… those exports will increase.”

China imported about $16.7 million worth of wine from Canada in 2012, and $9.5 million of that came from Ontario. The Chinese have also started buying vineyards in Canada. The Ottawa Business Journal reported in March that a wealthy Chinese investor has dropped $20 million on a mansion and vineyard in the Thousand Islands area. 

After China, South Korea was the third largest market for Canadian wines. Hong Kong, Japan, Singapore and Taiwan all made an appearance in the top 10.

You can compare the 2012 Canadian wine export market with the market in 1990 with the maps below. The darker shade a country is, the more Canadian wine it buys. While the United States has remained a large importer of our wine, there is a clear shift from Europe to Asian markets, especially China.

Wine Exports in 1990

Wine Exports in 2012

The total export market, for Canadian wine, however, remains small. As Gibson explains, it’s a matter of quality over quantity.

“The world is full of inexpensive wine that other countries can make less costly than we do… because they’re warm climates, their grapes grow a lot, there’s a higher yield. They can make a lot of cheap wine,” Gibson said.

“So it’s hard for us to compete on price when we export. We compete on quality and a style of wine. We sell smaller quantities of better product.”

“We will never a player in the cheap, bulk wine market, just because we can’t produce it that way,” he said.

Premium product, especially wine that’s been certified as being authentically Canadian, is building a following outside Canada, according Laurie Macdonald, executive president of the Vintners Quality Alliance in Ontario

“Particularly, icewine has been quite successful in Asia,” Macdonald said, that certifies wines made with 100 per cent local grapes.

Read: The Canadian Vintners Association talks about Icewine taking off in Asia

“In Ontario, VQA is the wine of origin here, as opposed to wine that contains imported products. So I think worldwide, consumers are more interested in wines that are, you know, authentic wines of origin. They’re not just commodities bundled from all over the place, they come from a specific place based on the origin of the grape.”

 Read: The VQA’s guidelines on certifying Ontario wines.

The EU free trade deal does help the Canadian wine industry in one aspect, though, as Gibson explains.

“Before the agreement, there were duties and taxes on certain equipment that was brought in from Europe,” he said.

“Grape presses, other machinery like tanks, oak barrels… so that when Ontario wine producers import that equipment from Europe, it will now be less expensive because there won’t be duties and taxes. So that will be a positive for domestic producers.”