Nova Scotia wine program backlash baffling to company that stands to profit the most

The president of a company that stands to profit the most from a new provincial wine program is baffled by claims the incentive could be "catastrophic" to local wineries.

"I think that reference is hard for me to comprehend. I really don't know what they're saying," John Peller, president of Peller Estates, told CBC News.

"That would be like them saying that investment in the cider industry [is] threatening to them. In fact, I'm the living proof that investing in all aspects of the wine industry, both the value and the premium, is good for the entire industry."

A comment about the program being catastrophic was made earlier this week by Karl Coutinho, board chair of Wine Growers Nova Scotia and president of Avondale Sky Winery in Newport, N.S.

Coutinho said he and his colleagues are concerned local wineries wouldn't be able to keep up with commercial producers that can buy cheaper grapes abroad, produce more and charge less.

Peller said the provincial program  — that would provide between $6 million and $12 million a year to companies that bottle wine in the province but can purchase their grapes from outside of Nova Scotia and Canada — came about after the province approached his company following a deal between Canada and Australia to resolve a trade dispute.

He said his company suggested the program as one way to support the wine industry.

Ontario-based Peller Estates has a winery in Truro, N.S., with capacity to produce about 400,000 cases of wine, sparkling wine and cider a year. Peller said his company uses more than 1.27 million kilograms (2.8 million pounds) of Nova Scotia apples for its cider each year.

Claudia De Fuentes, a professor who teaches innovation and entrepreneurship at the Sobey School of Business at Saint Mary's University in Halifax, has studied Nova Scotia's wine industry. She says the changes may not benefit the whole sector.

De Fuentes says the Houston government needs to consider the consequences of the incentive on local grape growers.

"They can kill or really harm the farm wineries in Nova Scotia because they are really eroding the capacity that farm wineries have been developing over a period of 30 years, right? In terms of growing grapes, in terms of grape production or wine production, but also in terms of innovation," she said.

De Fuentes said local wineries are also a boost to tourism and contribute more to rural economies.