VIDEO: BC wine industry hoping for help as tax break disappears

If you love your locally produced wine, it could be coming with a higher cost as of next year, and you can blame Australia.

For fifteen years, domestically produced wine has been exempt from federal excise tax.

Sometimes referred to as a "sin tax", it's paid by other alcohol producers, cigarettes and cannabis products.

That exemption is about to disappear next year thanks to a successful challenge by Australia which argued it put imported wine at an unfair disadvantage.
The tax adds up to about $6 per case or 50 cents per bottle.

"That money has to be made up somehow," said Miles Prodan, the president and CEO of Wine Growers BC. "We're extremely reluctant to pass that on to consumers."

But he also said wineries aren't as profitable as many people imagine, and the added expense could bring some to the tipping point.

"It either comes out of the winery's bottom line or some adjustment has to be made and we're worried that it could be the loss of some people involved in this industry."

For the federal government will be collecting an additional $40 million each year thanks to the change.

Prodan and others in the industry are hoping that the additional revenue is re-invested in the wine industry in the form of subsidies for growers so they can maintain their position in the marketplace.

"Our argument to government is that money is critical to the success of our industry," said Prodan. "We're asking for that to come back as a subsidy for fresh grown 100% Canadian grapes."

Prodan is hoping there is something for the industry in the Federal Budget that comes out later this month, but with everything else that's been happening, so he admits the timing isn't great.

"It's really just a matter of getting back what we had anyways," he said. "So we're just asking that it be passed back directly to us."

The federal budget comes down April 19.