59th Annual Report and Financial Statements FOR THE YEAR ENDING JANUARY 31ST, 2007

Transcription

1 59th Annual Report and Financial Statements FOR THE YEAR ENDING JANUARY 31ST, 2007

2 We are the advocate of all processing grape growers in Ontario working on their behalf to ensure the grape growers needs are met. VISION To have Ontario grown grape products demanded worldwide. MISSION To achieve sustainable growth and profitability by creating an improved environment for Ontario grown grape products. VALUES Accountability We are accountable to the grape growers for decisions made and for the rationale upon which these decisions are made. Innovation We support innovation through research, new technology and continuous improvement of services provided to the grape growers. Quality We promote quality by developing and setting standards for vineyard management for the grape growers. Respect We understand the value of people to our organization s success. As such, we trust, respect and value the opinions of all employees and grape growers. Responsiveness We are responsive to the needs of the grape growers in a timely manner so that they are supported in their activities which improve their livelihood and economic health. Service We exist to serve grape growers by providing them with current, informative and supportive services in order to maintain and grow the industry in Ontario. Back Row (Left to Right): Steve Fernick, David Wiley, Juan Neumann, Bart Huisman and Marty Byl. Front Row (Left to Right): Doug Hernder, Bill George Jr. (Vice Chair), Ray Duc (Chair) and Debbie Zimmerman (CEO) Board and Delegates CHAIR Ray Duc VICE-CHAIR Bill George Jr. DIRECTORS Marty Byl Steve Fernick Doug Hernder Bart Huisman Juan Neumann David Wiley DELEGATES Canadian Horticultural Council Ray Duc Chamber of Commerce St. Catharines David Wiley Grape Industry Advisory Committee Wine Ray Duc, Bill George Jr., Doug Hernder, Juan Neumann (alternate) Juice Ray Duc, Bill George Jr., Steve Fernick, David Wiley (alternate) Niagara Grape and Wine Festival Doug Hernder, Debbie Zimmerman (alternate) Niagara Peninsula Fruit and Vegetable Growers Association Marty Byl Ontario Federation of Agriculture Steve Fernick Ontario Fruit and Vegetable Growers Association Ray Duc

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4 2 G R A P E G R O W E R S O F O N T A R I O

5 Message from your Board Chair Over the course of 2006 the Board has moved forward on several initiatives which help to create an improved environment for grape growers and the grape growing industry. In 2007 the Grape Growers of Ontario (GGO) celebrates its 60th Anniversary as an organization. As I look back on 60 years of history the grape growing industry in Ontario has grown to world renowned status. It has done so because of the persistence, dedication and commitment growers put forth on a daily basis to growing quality grapes. Due to grower vineyard management, our vineyards rebounded from a crop of 26,198 tonnes in 2005 to a total crop of 64,178 tonnes in This is our second largest crop since This year's harvested grapes were excellent in quality and will be instrumental in the production of some of the best VQA wines. As part of the short crop Memorandum of Understanding(MOU), as it relates to the three year wine grape price agreement, 2006 wine grape prices increased by 3% across Ray Duc, Chair all varietals over Growers will receive a further increase of 2% for 2007 wine grape prices. Juice grape prices were set through negotiations which took place in August. Juice grape growers continue to receive low market prices for their grapes. Growers received $305 per tonne for Niagara grapes and $299 per tonne for Concord grapes. In 2006 we continued to focus our attention on research initiatives such as the wind machine project, Phase II of our Vitis (GIS) project, vine monitoring, hot water treatment of imported vines and National Replant. In addition, discussion ensued regarding the development of a Vineland Research and Innovation Centre and an Ontario Grape and Wine Research Foundation. The GGO continued, in 2006, to build relations with government in matters affecting the grape growing industry. The 5 ministry committee (Wine and Grape Strategy Steering Committee) which was formed to review issues affecting the grape and wine industry has proven to be effective and proactive. In September 2006, Matthias Oppenlaender was crowned Grape King. Matthias carries on the tradition of serving as ambassador for the grape growing community. Our thanks are extended to Doug Hernder for serving as last year's Grape King. I thank the Board of Directors for their continued commitment to the grape growers of Ontario and extend my appreciation to the staff of the Grape Growers of Ontario for their ongoing support and efforts on behalf of our over 530 members. Ray Duc Board Chair Grape Growers of Ontario Celebrating VQA wines with Mr. Dan Aykroyd at the Scotiabank Luncheon

6 Message from your CEO Since 1947, the Grape Growers of Ontario (GGO) has been the voice for growers and has worked on their behalf. We will continue to do so with energy, pride and commitment. As we enter our 60th year as an organization, our efforts are dedicated to strengthening our role with growers and partners. I am pleased to report on the progress made by the GGO in the 2006/2007 year marked the second year of our 3 year wine grape pricing agreement established through the short crop MOU. The pricing agreement continues to apply for wine grape prices saw an increase of 3% and 2007 grape prices will increase by 2% across all varieties of wine grapes. Juice grape prices were set through negotiation for Communication and building relations with our members and industry partners remain a priority. We continue to communicate with members through newsletters, meetings and the website. Two open houses were held to discuss wind machines in March and December In addition, the Vineland Renaissance project and the Ontario Grape Debbie M. Zimmerman, CEO and Wine Research Foundation proposal was presented to members at a special meeting in January We worked with industry stakeholders to present Uncorked - a Grape and Wine Tradeshow and Conference which focused on cold hardiness and consumer and market trends. A Grape and Wine Industry BBQ and Garden Party held in August 2006 provided us with an opportunity to join with growers and wineries to celebrate our industry and those who work within it as a social event. This year members of the Board and staff attended Prince Edward County's Tradeshow and AGM and had the opportunity to meet members and tour area vineyards and wineries. Throughout 2006 relations continued to be built with the Provincial and Federal levels of government in matters affecting the grape growing industry. Presentations were made to the Standing Committee on Finance at both the Provincial and Federal levels of government regarding the Replant Program. On behalf of the GGO I would like to extend our sincere appreciation to the Government of Ontario for providing $1 million into grape industry research. The GGO continued lobbying both the Federal and Provincial levels of government for the implementation of a Replant Program. This Program will assist growers in diversifying Ontario's vineyard infrastructure. An economic impact study on the Replant Program was completed and shared with government representatives. Research is an integral part of GGO business. Work continued on our wind machine and VITIS (GPS) projects. This year the GGO entered into new research initiatives such as the import vine monitoring program and the hot water treatment of imported vines from France. Our ability to work quickly and efficiently with all stakeholders involved in the importation of vines has set a precedent for other industries to follow. The GGO, along with nursery brokers, have shown the ability to successfully monitor our own industry, with confidence that we can deliver accurate traceability reports. Through our sponsorship with the Grape and Wine Festival, we raised the bar of the Scotiabank Luncheon. With the help of our partners, the Friends of the Greenbelt Foundation and Scotiabank, we attracted the largest attendance to the Luncheon with our outstanding guest speaker, Mr. Dan Aykroyd. As part of our strategic planning process, consultations were held with industry stakeholders and growers. With the input from these consultation sessions we are able to develop strategic directions, both short term and long term, to move the organization forward. I would like to thank the Board for their continued support of initiatives that move the grape growing industry forward and I extend my appreciation to staff for their dedicated work on behalf of the GGO. Debbie M. Zimmerman CEO Grape Growers of Ontario 4

7 Weather 2006 proved to be a warm year. Above normal winter temperatures ended the calendar year for grape growers across Ontario. In the Niagara region, January through March saw few days with a minimum temperature below -10 C; in January Vineland Station measured none at all. While a cold snap in Prince Edward County at the end of February brought that month's average temperature closer to long term normals, unusually warm temperatures began the year there as well. Growers to the southwest also experienced a warm start to the year. January in Harrow saw the average monthly temperature 6.3 C above normal at 1.7 C. While not as severe as 2005, spring of 2006 had below normal rainfall in the Niagara region. Rainfall in July 2006 measured well above normal, but still not to the extreme of August and September of 2006 experienced rainfall trends opposite to 2005 with a below normal August and above normal September. Prince Edward County had a drier than normal March and August and more rain than normal in May. Especially wet was Prince Edward County in October, with Trenton measuring 223mm. In the Southwest, Harrow also had a drier than normal spring. From May to October, rainfall in the southwest measured higher than normal for all months except a slightly drier than normal August. Growing season temperatures for the Niagara region were close to normal with accumulated degree days slightly above normal for April, May and July. At Vineland Station, the last three days of May saw temperatures above 30 C, bringing May s average to its highest in years. In Prince Edward County, monthly average temperatures sunk to normal values for September and October, but measured above normal for all other months. Monthly average temperatures in the Southwest measured closer to normal for most of the season, dropped below normal for September and October, and then maintained autumnal temperatures into the winter. Like its entrance, 2006 had a warm exit. Temperatures remained above normal for all grape growing regions for November, December and into January Temperatures in the Niagara region briefly dropped below -10 C for the first time of the season in December, but then remained above -10 C until mid-january. Prince Edward County s wet October had a near normal monthly average temperature, but was followed by three warmer than normal months. To the southwest, Harrow temperatures did not measure below -10 C until January 17th of this year. In December, Harrow's average daily temperatures remained above freezing for all but 6 days. The GGO and Weather Innovations Incorporated (WIN), formerly known as the Ontario Weather Network (OWN), continue to work together to bring valuable weather-based services to Ontario s grape industry. An example of this is WIN s preparation of this 2006 weather report. WIN is a University of Guelph spin-off company, delivering timely weather based information to organizations and individuals alike. The WIN team will continue to build on their services to the GGO beginning with the upgrade of the Niagara weather network to a near real-time wireless system and by expanding irrigation, disease modeling and temperature inversion programs throughout the region in

8 Production TABLE I presents the production and disposition of grapes from 2002 through Grapes purchased by licenced Ontario wineries was 52,963 tonnes. This figure includes 6,201 tonnes left for icewine and late harvest production. Overall production was up by 37,980 tonnes from the previous year. TABLE I - Production and Disposition of Grapes ( tonnes) PROCESSED BY CATEGORY wine 43,700 26,239 45,704 18,162 52,963 jams and juice 8,108 10,221 10,405 7,735 10,231 homewine making and distilling SUB-TOTAL 52,465 36,935 56,787 26,198 64,178 Export Sales TOTAL PROCESSED 52,761 36,935 56,787 26,198 64,178 Fresh Grape Sales* 6,425 5,665 7,103 4,672 7,243 * Includes sales through the Fresh Grape Growers Marketing Board and an estimate of sales of fresh grapes to the homewine trade Processing Prices As part of the short crop MOU, as it relates to the three year wine grape price agreement, 2006 wine grape prices increased by 3% across all varietals. Classes 1,2, and 3 were set through negotiations on August 21, The minimum price established for each class of grapes sold for processing in 2006 is shown below with the 2005 price listed. CLASS VARIETY $ PER TONNE Concord, Fredonia, Patricia, President & VanBuren Niagara & Wiley White Delaware, Dutchess, Elvira, Himrod, V64032, Agawam, Catawba, Veeblanc, Vincent & Ventura DeChaunac & Rosette a Marechal Foch & Leon Millot b Blue French hybrids, Le Commandant, Baco Noir, Cascade, Castel, Chambourcin, Chancellor, G.R.7, Villard Noir & Chelois c Experimental red hybrids, Landot, Varousette & Florental Canada Muscat, New York Muscat, V61122, V64111, B.S & Couderc Seibel 10868, Seibel 13047, V50201, Seibel 8229, Aurore, B.C. Riesling, Cayuga White, J.S , Siegfried Rebe, Seyve-Villard 172, S.V , Verdelet, Vivant & white French hybrid a Seyval Blanc, Vidal

9 CLASS VARIETY $ PER TONNE b G.M. 311, G.M. 318, G.M. 322, G.M , G.M & Pollux c Experimental white hybrids, V49404, V65232, V71141 & V J. Riesling 1,442 1,400 9a Auxerrois, Bacchus, Kerner, Scheurebe & Welsch Riesling 1,205 1,170 9b Chardonnay 1,494 1,450 9c Gewurztraminer 1,607 1,560 9d Pinot Gris 1,607 1,560 9e Sauvignon Blanc 1,607 1,560 9f Aligote, Gelber Muskateller, Goldburger, Gruner Veltliner, Morio Muscat, Muscat Ottonel, Pinot Blanc, Rieslaner, Riesling Traminer, Chenin Blanc, Melon de Bourgogne, Experimental white vinifera & Sylvaner 1,267 1, Gamay & Zweigeltrebe 1,354 1,315 10a Pinot Noir 2,060 2,000 10b Cabernet Sauvignon 2,039 1,980 10c Cabernet Franc 1,751 1,700 10d Merlot 2,060 2,000 10e Shiraz, Sirah, Syrah 2,060 2,000 10f Experimental red vinifera, Blauberger, Limberger, Wildbacher Blau & Zinfandel 1,339 1,300 Distilling Sherry Grapes left on the vine for select late harvest or icewine production: Bonus of 25% based on the price of normal harvest grapes of the same variety at the appropriate sugar level determined by samples taken at regular harvest time. Late harvest juice at 26 Brix Vidal icewine juice at 35 Brix All vinifera icewine juice at 35 Brix $ 4.49 per litre $15.45 per litre $23.69 per litre 7

10 Value of Crop Purchased TABLE II compares the total crop value sold to licenced processors from 2002 to 2006 and includes both domestic and export sales. TABLE II - Farm Gate Value of Grapes Sold for Processing ( ) Gross Farm Gate Value - $ ,582 26,515 50,029 22,700 68, Crop Year by Category Tonnes Value Wineries 52, $64,444, Jams & Juice 10, ,124, Homewine , Total 64, $68,533, Licence Fees In the aggregate, licence fees for the fiscal year represent approximately 2.0% of the total farm gate value of the crop. This compares to the fiscal year in which licence fees represented approximately 2.1% of the crop value. 8 TABLE III - Licence Fees Per Tonne by Class and Variety ( ) CLASS VARIETY $ PER TONNE & 2 Concord, Niagara Veeblanc, Vincent All other varieties DeChaunac and Rosette a Foch and Leon Millot b Blue French Hybrids c Experimental Red Hybrids Canada/New York Muscat B.S. 2846, Couderc 29935, V61122, V White French Hybrids a Seyval Blanc, Vidal b Geinsenheim, Pollux c Experimental White Hybrids J. Riesling a Kerner, Bacchus, Auxerrois, Scheurebe b Chardonnay c Gewurztraminer d Pinot Gris e Sauvignon Blanc f Experimental White Vinifera Gamay, Zweigeltrebe a Pinot Noir b Cabernet Sauvignon c Cabernet Franc d Merlot e Shiraz, Sirah, Syrah f Experimental Red Vinifera Distilling Sherry

11 Grape Vine Census TABLE IV provides data collected from the 2001 provincial census, and the Board s surveys of removals and plantings for 2002, 2003, 2004 and TABLE IV - Number of Grape Vines in Ontario ( ) % Change Classes 1-3 Concord 1,534,267 1,439,248 1,401,767 1,385,747 1,372, Elvira 107,371 45,005 9,954 6,499 5, Fredonia 114,136 92,604 72,776 69,084 63, Niagara 724, , , , , Sovereign Coronation 138, , , , , SUB-TOTAL 2,618,937 2,429,795 2,340,545 2,308,849 2,283, Classes 5-7 Baco Noir 710, , , , , Chambourcin 143, , , , ,656 - De Chaunac 147, , , , ,247 - Geisenheim 178, , , , , Marechal Foch 188, , , , , New York Muscat 42,070 39,305 36,025 36,025 32, Seyval Blanc 317, , , , , S.V , , , , , Vidal 256 1,325,879 1,310,471 1,303,163 1,312,360 1,342, Villard Noir 45,139 38,939 34,639 34,639 34,639 - SUB-TOTAL 3,308,442 3,227,938 3,184,071 3,133,073 3,103, Classes 9-10 Auxerrois 91,038 91,038 71,810 54,010 46, Cabernet Franc 1,299,612 1,306,522 1,305,156 1,318,661 1,364, Cabernet Sauvignon 1,113,523 1,182,560 1,168,533 1,164,657 1,180, Chardonnay 1,927,563 2,007,097 1,976,732 1,974,523 2,054, Gamay 525, , , , , Gewurztraminer 272, , , , , J. Riesling 1,057,871 1,084,207 1,118,494 1,189,672 1,306, Merlot 857, ,827 1,006,491 1,035,558 1,047, Pinot Gris 207, , , , , Pinot Noir 549, , , , , Sauvignon Blanc 269, , , , , Zweigeltrebe 166, , , , , SUB-TOTAL 8,337,649 8,890,723 9,046,476 9,206,590 9,594, Other Varieties 618, , , , , TOTAL 14,883,494 15,257,083 15,316,943 15,400,377 15,748,

12 10 G R A P E G R O W E R S O F O N T A R I O Production of Processed Grapes by Variety TABLE V summarizes purchases by processors by variety from inclusive. The 2006 crop was up from 2005 by 37,980 tonnes. As such, most varieties of grapes experienced an increase. White hybrid production at 14,534 tonnes was up 7,677 from the 2005 crop. Red hybrid production was also up by 1,980 tonnes from White vinifera varieties increased dramatically from 4,304 tonnes in 2005 to 15,847 in Red vinifera varieties also experienced an increase of 13,563 tonnes from the 2005 crop. Overall red and white vinifera varieties at 33,220 tonnes were up drastically from the 2005 crop. TABLE V - Purchases by Processors by Variety ( tonnes) Classes 1-3 (labrusca) Concord 5,378 7,643 7,009 5,292 7,882 Elvira Niagara 2,760 2,700 3,515 2,576 3,218 Miscellaneous SUB-TOTAL 8,469 10,485 10,608 7,952 11,169 Classes 5-6 (blue/red French hybrids) Baco Noir 2,104 1,973 3,065 1,628 2,753 Chambourcin De Chaunac Marechal Foch 763 1, ,042 Muscat (Canada and New York) Rosette Villard Noir Miscellaneous SUB-TOTAL 4,224 4,229 5,828 3,275 5,255 Classes 7-7c (white French hybrids) S.V Seyval Blanc 1,590 1,629 1, ,296 Vidal 256 9,879 8,576 11,625 4,661 11,065 G.M G.M , ,466 G.M Miscellaneous 7-7c SUB-TOTAL 13,500 12,121 16,235 6,857 14,534 SUB-TOTAL (hybrids) 17,724 16,350 22,063 10,132 19,789 Classes 9-9f (white vinifera) Auxerrois Chardonnay 5,677 2,142 5,794 1,830 6,507 Gewurztraminer ,181 J. Riesling 4,165 2,049 4,168 1,645 4,623 Pinot Blanc Pinot Gris Sauvignon Blanc ,695 Miscellaneous 9-9f SUB-TOTAL 13,197 4,954 11,812 4,304 15,847 Classes 10-10f (red vinifera) Cabernet Franc 4,174 2,077 4,779 1,231 5,167 Cabernet Sauvignon 3,007 1,105 2, ,413 Gamay 1, , ,707 Merlot 2, , ,785 Pinot Noir 1, , ,959 Zweigeltrebe Miscellaneous 10-10f* SUB-TOTAL 13,371 5,146 12,304 3,810 17,373 SUB-TOTAL (vinifera) 26,568 10,100 24,116 8,114 33,220 GRAND TOTAL 52,761 36,935 56,787 26,198 64,178 *Includes sherry

13 Grape Sugar Testing Program The Wine Grape Sugar Testing Program was once again coordinated by Errol McKibbon of McKibbon Associates, a privately owned company acting as third party testers. Because of the large crop tonnage, the total number of samples tested in 2006 increased to 3,857 from 2,269 in The number of wineries/processors serviced by this program was 108. Growers were provided with sugar test results at the same time as the wineries. Tabulation of Growers The number of growers registered with the Grape Growers of Ontario in 2006 increased from 497 in 2005 to 538 in The total number of growers reflect growers with production in TABLE VI - Number of Growers Registered with the Board ( ) District 1 Town of Niagara-on-the-Lake District 2 City of St. Catharines & Judicial District of Niagara South District 3 Town of Lincoln District 4 Town of Grimsby, Township of West Lincoln, Regional Municipality of Hamilton-Wentworth, Prince Edward County & Southwestern Ontario TOTAL Wine Sales in Ontario TABLE VII below shows the five-year history of wine sales in Ontario. Total wine sales in Ontario grew by 3.3% to million litres in Ontario wine sales also increased by 1.8% to 52.1 million litres. Imported wine sales increased by 4.6% to 78.8 million litres, while out-of-province wine sales in Ontario decreased by 13.8% to 0.8 million litres. Market share for Ontario wines decreased from 40.2% to 39.6% in TABLE VII - Wine Sales in Ontario* (2001/02 to 2005/ litres) Ontario Wine Sold in Ontario** 43,983 45,359 49,173 51,276 52,190 Annual Change % Imported Wine Sold in Ontario 63,339 66,732 70,315 75,386 78,856 Annual Change % Out-of-Province Sales in Ontario 1,671 1,414 1, Annual Change % Total Wine Sold in Ontario 108, , , , ,853 Annual Change % Marketshare of Ontario Wines in Ontario % * Fiscal Year April 1 to March 31 (statistical data provided by the LCBO) ** Includes sales through LCBO, Winery Retail Stores, to Embassies, Airlines and Industrial sales 11

14 TABLE VIII below shows VQA versus non VQA sales in Ontario to March 31, VQA sales in Ontario increased 20.7% from 8.2 million litres in 2005 to 9.9 million litres in Non VQA wine sales in Ontario remained the same as VQA sales outside of Ontario decreased by 6.7% from.96 million litres in 2005 to.89 million in TABLE VIII - VQA Versus Non VQA Sales in Ontario ( 000 litres) Total Ontario Wine Sales in Ontario 43,491* 44,228* 45,672* 50,448* 52,125 Total VQA Sales in Ontario 8,220** 10,109** 10,432** 8,174** 9,874** Total Non VQA Sales in Ontario 35,271 34,119 35,240 42,274 42,251 Total VQA Sales Outside Ontario 1,197** 1,253** 1,004**,964** 0,897** * Ontario Share from LCBO Annual Report - March 31, 2006 ** VQA figures from VQAO Annual Report - March 31, 2006 TABLE IX below shows the quantity of blending grape product imported into Ontario over the last five years. The Ontario Wine Content and Labelling Act, which came into effect January 1, 2001, requires that Ontario wine contain a minimum of 30% Ontario grape content. Due to the 2005 short crop, the Wine Content and Labelling Act was amended to allow the time-limited manufacture of wines in the province with up to 99% imported grape or grape product, provided that all such wine is bottled before February 1, Wine imported for blending purposes increased by 30.9% from 25.1 million litres to 32.8 million litres. Concentrate decreased by 71.7% from 7,167 equivalent tonnes to 2,026 equivalent tonnes. Grape juice is up 52.6% from 2,283 equivalent tonnes to 3,486 equivalent tonnes. In total blending material was up 14.9% from 42,936 equivalent tonnes in 2005 to 49,356 equivalent tonnes in TABLE IX - Blending Materials Imported into Ontario (2001/ /06) Wine (litres) 13,558,895 12,655,164 22,455,496 25,114,702 32,882,685 Concentrate (equivalent tonnes) 4, , , , , litres per tonne) Grape Juice (equivalent tonnes) 1, , , , , (@ 750 litres per tonne) Statistical data provided by Alcohol and Gaming Commission of Ontario 12

15 Importation of Wine TABLE X presents the quantity of importation of wine categories from Total imports of all wine categories in Canada increased by 7.3% from the previous year to 236 million litres. This litre increase was due almost entirely to the increase in still wines of 15,982 million litres. TABLE X - Quantity of Importation of Wine Categories (2002 to litres) IMPORTS Sherry 1,032 1, Sparkling Wine 4,744 5,004 4,764 5,148 5,449 Still Wine 163, , , , ,343 Vermouth 2,692 2,681 2,622 2,705 2,666 Port 2,699 2,787 2,388 2,522 2,456 Aperitif 1,133 1,165 1,019 1,039 1,000 Champagne Crackling Table * * * * * Miscellaneous Wines 6,534 6,911 7,671 9,265 9,237 TOTAL 182, , , , ,901 *Included with Sparkling Wine Statistical data provided by Association of Canadian Distillers TABLE XI shows the volume of still table wines by country of origin imported into Canada from inclusive. In 2006 total importation of still table wines into Canada increased by 8% to 213 million litres compared to 197 million litres in Imports from Australia were up significantly. France remains the largest single importer into Canada followed by Italy and Australia. TABLE XI - Importation of Still Table Wines by Country of Origin (2002 to litres) Australia 18,390 24,389 34,257 38,188 40,329 Eastern Europe 1,785 1,623 1,399 1,182 1,045 France 55,404 55,293 48,927 50,524 52,275 Germany 3,960 3,969 3,890 3,813 4,051 Italy 35,954 38,774 38,625 39,869 43,178 Portugal 2,470 2,674 3,003 3,297 3,553 South Africa 2,656 3,295 4,002 5,505 6,655 South America 16,850 17,413 20,001 21,754 24,498 Spain 5,366 7,396 7,159 8,205 10,122 United States 17,247 17,506 18,778 20,777 22,999 Other Countries 3,041 3,367 3,529 4,247 4,638 TOTAL 163, , , , ,343 Statistical data provided by Association of Canadian Distillers 13

16 Crop Insurance Data included in TABLE XII below was supplied by AgriCorp, the Corporation responsible for delivering Crop Insurance Programs and provides the statistical history of the Grape Crop Insurance Program, inclusive. The number of accounts increased from 332 to 336 in Claims decreased dramatically by 283 in 2005 to 51 in The dollar value of the claims decreased from $22.3 million in 2005 to $1 million in TABLE XII - Crop Insurance ( ) Year No. of Accounts No. of Claims Total Premiums* Total Claims Deficit/Surplus $ 000 $ 000 $ , , , ,944 2, ,591 1, , , , , ,022 1, ,006 1, ,136 2, ,061 16,714-14, ,743 3, , ,188 22,308-17, ,205 1, ,159 * Total grower and government premiums Self-Directed Risk Management (SDRM) TABLE XIII includes statistics pertaining to SDRM participation, total eligible net sales and average eligible net sales for grapes for the stabilization years. TABLE XIII - SDRM ( ) Number of Participants Total Eligible Net Sales ($) Average Eligible Net Sales ($) ,063,486 45, ,814,483 87, ,994,989 47, ,319, , ,126, , ,227, ,620 14

17 MEMBERSHIPS G R A P E G R O W E R S O F O N T A R I O Memberships and Sponsorships The Grape Growers of Ontario is a contributing member and/or sponsor to a number of agricultural and trade organizations. The organizations supported in the 2006/2007 year include: Amount Agricultural Adaptation Council $ 150 Canadian Horticultural Council 8,053 Grimsby and District Chamber of Commerce 230 Lincoln Chamber of Commerce 225 Ontario Agri-Food Education Inc. 458 Ontario Agricultural Commodity Council 1,125 Ontario Fruit & Vegetable Growers Association 14,480 Ontario Federation of Agriculture 710 President s Council 250 St. Catharines Chamber of Commerce 346 St. Catharines Club 610 Winegrape Growers of America 240 TOTAL $ 26,877 SPONSORSHIPS Amount Grape King $ 2,500 Grape Stomp 535 In Stride Productions - Niagara Running Series 1,000 Lincoln Agricultural Society 200 Niagara College - Grape Growers of Ontario Wine Tasting Room 15,000 Niagara Economic - Development Corporation - Wine Route Enhancement Initiative 2,500 Niagara Grape and Wine Festival Niagara Wine Festival 20,000 Niagara Grape and Wine Festival Niagara Icewine Festival 5,000 Niagara Peninsula Fruit and Vegetable Growers Association 500 Official Guide to Wineries of Ontario 3,300 Ontario Wine Awards 1,500 Prince Edward County Winegrowers Association-Terrior Wine Festival 1,500 TOTAL $ 53,335 15

18 Research Initiatives 2006 Over the course of 2006, we have focused our efforts and research initiatives in order to gain a better understanding of the impact of weather and other related challenges to our industry. We continue to secure funding from government and industry contributors for research, value added information and market development projects for Ontario grape growers. The GGO expresses gratitude to the Agricultural Adaptation Council, the Government of Ontario, the Ontario Ministry of Agriculture, Food and Rural Affairs, Agriculture and Agri-Food Canada, National Grape Co-op, Friends of the Greenbelt Foundation and industry supporters for their contributions enabling us to establish and sustain valuable projects. Growers had the lowest crop yield in the history of the GGO in 2005 due to the unusually severe cold weather. Since that experience, among the risk reduction strategies implemented, growers have invested in wind machine technology. We continue to move forward on our three year wind machine and plant hardiness research project with industry stakeholders such as OMAFRA, Wine Council of Ontario and our growers. The project continues to address the issue of how to reduce the risk of spring and fall frosts and winter injury to grape vines, by looking specifically at the survival of cultivars. A wind machine communication strategy has been completed and is currently being implemented in order to educate the public about their use. In 2006, Phase II of the GIS/GPS vine management system (VITIS) project moved to the development of a computerized weigh bill system and the incorporation of a food safety and traceability component. In the fall of 2006, a paper pilot of the weigh bill system was conducted with 6 wineries. Following successful completion of the paper pilot and analysis of the results, an electronic pilot is underway with the help of our partners Strategem, Agricorp and participating wineries. A rollout of the computerized weigh bill system will be in place for the 2007 harvest. Over the course of 2006, the GGO was pleased to partner with CFIA, nursery brokers and growers to implement a three year vine monitoring program for phytoplasmas on imported vines from France. The program involves the tracking of planted vines within the Vitis Vine Management System which, when accompanied with the vineyard map, is a useful tool for CFIA audits and historical record keeping. Over the next three years extensive vector monitoring will take place. This will allow us to act accordingly if the vector responsible for disease spread is located. Given the current situation with importation of vines from France, the GGO continues to be actively involved with setting industry accepted standards on Hot Water Treatment of vines. As we research the longterm effects of Hot Water Treatment on vine sustainability we continue to work in collaboration with nursery brokers, researchers (scientists) and growers. As CFIA regulations have changed to only allow vines into Canada from France if they are Hot Water treated, tracking will also include this information. Innovative vineyard practices continue through a partnership with the Weather Innovations Network to enhance our weather stations and the type of data growers receive from them. Weather stations have been replaced, updated and are now wireless. Wind Research Stakeholder Steering Committee views prototype programmable freezer 16

19 The concept of an Ontario Grape and Wine Research Foundation as per NeoBio Consulting's report titled, Recommendations for the Establishment of an Ontario Grape and Wine Research Foundation was discussed. In the report a recommendation was put forth that an Ontario Grape and Wine Research Foundation should be considered where funding is stable and based on a fair division of industry contributions. During the year the Vineland Renaissance project concept was brought forward to the GGO and its members. To date, a business case for the revitalization of the Vineland Research Station has been submitted to the Ontario government for their review. Staff participating at Uncorked - Left to Right: Nick Lemieux, Nathalie Dreifelds, Amy Zimmerman, Debbie Zimmerman, Julie Dixon and Kathy Sirotnik Pesticides Wayne Roberts is a shared employee of the GGO and the Ontario Tender Fruit Producers' Marketing Board (OTFPMB). In his role as Pest Control and IPM Coordinator, Wayne works closely with employees from the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA), Agriculture and Agri-Food Canada (AAFC), the Pest Management Regulatory Agency (PMRA), chemical manufacturers and consultants, in order to secure access to new and/or more effective crop protection products. In 2006, Wayne attended the 4th Annual Minor Use Priority Setting Workshop in Ottawa to lobby AAFC and PMRA to fund and approve strategic minor use registrations. Two pesticides - the fungicide Acrobat (dimethomorph) and the herbicide Chateau (flumioxazin) were selected for Priority A research and field trials. In 2006, the grape industry saw a few new pesticide registrations including Milstop (potassium bicarbonate) for control of powdery mildew. Wayne represents the Grape Growers of Ontario on various committees such as: the Multicoloured Asian Lady Beetle (MALB) Task Force; the National Steering Committee on Grape Vine Imports; the National Steering Committee for the Grape Pesticide Reduction Program; and the OASCC Grape and Wine Research and Services Committee will be the last year that the organophosphate Guthion (azinphosmethyl) is available to the grape industry. We are in need of new insecticides for control of grape berry moth, especially in our high pressure zones in Niagara. There are promising new products but they are still a few years from registration on grapes. 17

20 Promotion Activities for 2006 The GGO hosted an annual Media Day held in March where presentations were made to media personnel, politicians, bureaucrats and other industry members. Media Day 2006 provided a great opportunity to review the crop year, highlight our current projects and discuss current issues facing the industry. At the Annual General Meeting, the Award of Merit is presented each year by the Grape Growers of Ontario in recognition of outstanding contributions made by individuals to the Ontario grape industry. This year s Award of Merit recognized growers who have been growing grapes for 50 years or more. The GGO and its membership congratulate them on achieving excellence in their grape growing endeavours and for their commitment to the Ontario grape growing industry. The GGO was pleased to continue with its 5 year commitment as a sponsor for the GGO Wine Tasting Room in Niagara College's Culinary and Wine Institute. This sponsorship allows for the continuing marketing of the GGO and grape growing industry as a valuable partner in promoting the vineyard image as an important part of Ontario's economy and in supporting education and research for the oenology sector of Ontario's business. As a founding member the GGO continues its sponsorship of the Niagara Grape and Wine Festival. In partnership with the City of St. Catharines and the St. Catharines Jaycees, we had a successful Mayor's Grape Stomp. The GGO helped to raise the bar of the Scotiabank Celebrity Luncheon. We were delighted to have Dan Aykroyd, actor and winery owner, as the guest speaker for this event. The GGO expresses gratitude to our sponsors FCC, Scotiabank and the Friends of the Greenbelt Foundation. In 2006, we were proud to announce the crowning of the 50th Grape King, Matthias Oppenlaender of Huebel Grapes Estates and Country Tyme Vineyards and B&B as the Grape King during the Grape and Wine Festival. Congratulations Matthias! In November, we continued our tradition of hosting the Annual Wine Tasting event at the Legislative Assembly of Ontario. Congratulations to Fielding Estate Winery for having both their white and red wine chosen as the official wines to be served at the Ontario Legislature for TABLE XIV - Promotion Expenses (2004/ /2007) 2004/ / /2007 Promotions, Sponsorship & Public Relations $ 51,990 $ 54,053 $ 28,477 Niagara College - GGO Wine Tasting Room 2,500 10,000 15,000 Prince Edward County Winegrowers Association Terroir Wine Festival - - 1,500 Miscellaneous -Wines - 2,288 3,699 SUB-TOTAL 54,490 66,341 48,676 Grape & Wine Festival and Grape King s Crowning 22,543 24,297 16,792 TOTAL $ 77,033 $ 90,638 $ 65,468 Celebrating 50 Years of Grape Growing 18

21 AUDITORS' REPORT To the Members of Grape Growers of Ontario We have audited the statement of financial position of the Grape Growers of Ontario as at January 31, 2007 and the statements of unappropriated and appropriated net assets, operations and cash flows for the year then ended. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these financial statements present fairly, in all material respects, the financial position of the Grape Growers of Ontario as at January 31, 2007 and the results of its operations for the year then ended in accordance with Canadian generally accepted accounting principles. Chartered Accountants Licensed Public Accountants St. Catharines, Ontario, February 16,

22 See Accompanying Notes to the Financial Statements 20

23 See Accompanying Notes to the Financial Statements 21

24 See Accompanying Notes to the Financial Statements 22

25 See Accompanying Notes to the Financial Statements 23

26 24 G R A P E G R O W E R S O F O N T A R I O

27 25

28 26 G R A P E G R O W E R S O F O N T A R I O

29 Celebrating Grape Kings of the Past and Present 27

30 Year in Review 28

31 Back Row (Left to Right): Kathy Sirotnik, Janice Clark, Kathy Lewis, Julie Dixon. Front Row (Left to Right): Larissa Osborne, Debbie Zimmerman (CEO) and Sylvana Lagrotteria. Absent from the picture: Nathalie Dreifelds and Wayne Roberts Staff CEO Debbie Zimmerman EXECUTIVE ASSISTANT Kathy Sirotnik DIRECTOR OF MARKETING/BUSINESS & RESEARCH ANALYST Nathalie Dreifelds ADMINISTRATIVE ASSISTANT/GROWER RELATIONS Janice Clark PESTICIDE ISSUES Wayne Roberts SPECIAL PROJECTS ANALYST Julie Dixon TREASURER Larissa Osborne ACCOUNTS PAYABLE Kathy Lewis Address: 1634 South Service Rd. St. Catharines, ON L2R 6P9 Mail: P.O. Box 100 Vineland Station, ON L0R 2E0 Phone: 905) Fax: (905) Web: RECEPTIONIST Sylvana Lagrotteria

32 2006 Grape King Matthias Oppenlaender of Huebel Grapes Estates and Country Tyme Vineyards and B&B.