Eye on Tequila by Ian Chadwick – Tequila in Canada

Originally Posted on Tequila Aficionado March 2, 2001

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IanChadwickBy Ian Chadwick
Tequila Aficionado Magazine 
Contributor/Columnist

Canadians and tequila: it’s an awkward mix for many of our nation’s drinkers. Perhaps it’s because we’re a cool country and tequila is the product of the hot highlands of Mexico. It bottles too much sunshine, too much dry scrubland with it. Canadians turn more towards products from the wet, the cold, the winter. And stiffens our spine with an unwillingness to try anything new.

It might be a simple matter of geography. Canada is the world’s second largest country, populated with roughly the same number of people as in the state of California. Confronted as we are by the distances between our own communities, we find it difficult to embrace the mysteries and wonders thousands of miles to the south. And unlike the USA, Canada has only a tiny population of Mexicans and other Spanish-speaking natives, so we have little of their cultural influences within our own borders.

That may explain why you get confused, angry looks when you order a “good” tequila in a bar, then refuse it when served a low-quality but popular mixto. Or why bartenders seem dazed when you ask for a premium mezcal or añejo tequila. I’ve tried vainly to explain tequila to servers and bartenders, to dismiss the myth of the worm. “But I saw tequila with a worm myself, when I was in Cancun,” they protest. Or it was a friend, a relative who saw it. Of course, no one ever brought back the bottle as proof, but the myth endures as stubbornly as Santa Claus.

Personally, I believe the relationship between Canadians and tequila is hamstrung by our own bureaucracy. We’re still essentially a socialist nation. Except in Alberta, in all other provinces and territories, liquor and wine are selected and dispensed by provincial government agencies and outlets. The bureaucrats filter our drinking habits through their own monocular vision of what they think we should be allowed to imbibe. Only in 1993 did Alberta privatize its liquor sales, permitting consumers and the marketplace to determine the product line. As a result, Alberta has one of the best selections of tequilas available in this country.

Provincial governments are loathe to privatize their cash cow. In Ontario alone, alcohol sales added $780 million to provincial coffers in fiscal year 1998-99. The revenue from alcohol is too rich a prize to let go easily. And, of course, the government agencies are staffed by strong unions who understandably fight against job loss from privatization. The current Ontario government came to power on a promise to privatize the Liquor Control Board of Ontario (LCBO), but waffled in the face of resistance and has let the issue lie dormant for the past six years.

There is an upside of government management, however. The LCBO is reputedly the largest wine and spirits buying agency in the world, stocking more than 600 government-owned outlets across the province plus another 102 agency stores (see www.lcbo.com). That gives it enormous leverage when hunting for good prices. Unfortunately, that is often lost in the subsequent taxes applied to all imported alcohols. The other advantage is availability and standard pricing. While not always stocked in every store, what one store can get, every other store can order at the same price.

Another positive: government agencies run large testing laboratories to ensure quality control of all products. Bottles of wine, beer and spirits are regularly sampled for content. Many times shipments are rejected because of unacceptable chemicals or materials – including some well-publicized cases of broken glass in commercially bottled products. If nothing else, these agencies protect our health.

Canada_flagThis is not to say that Ontarians cannot import their own products. Case lots can be ordered through the LCBO’s special order office – at the price decreed by the LCBO, however. And individual bottles or small shipments may be brought in, if you follow the instructions. You must allow the LCBO’s customs brokers to assess the product and assign the appropriate taxes and duties to it. As long as you pay the taxes and shipping costs, the LCBO seems content to let residents buy as they wish from outside the province.

But who decides what Canadians can choose from? Who determines the selection that we see on the shelves? According to a 1999 story published in the Toronto Star, Canada’s largest circulation newspaper (www.thestar.com), the chairman of the LCBO is frequently wined and dined by liquor companies and agencies. He’s been flown around the world, given trips to Caribbean islands and golfing vacations, international winery tours and tastings. Products from these countries or companies appear more frequently on the shelf than those of their competitors, the story reported.

There are at best a dozen brands of tequila on the LCBO shelves. Stock is dominated at most stores by varying sizes of Cuervo Special and Sauza Blanco. Sometimes there is a Sauza Conmemorativo (a mixto añejo), and even less often one or two choices of 100 per cent agave tequilas may appear. Only in a small number of stores does the variety improve. In Ottawa, Canada’s capital, the province’s largest and newest LCBO outlet had only six brands on sale in June – out of almost 700 made in Mexico. Perhaps the mediocre selection of tequilas could be improved by simply giving the LCBO chair and his administration an opportunity to visit and tour Jalisco. If, that is, the companies can afford to host them. This is not the best time to freeload off the already-hurting distillers.

maple liqueurTequila sales have never been strong here, but will certainly suffer in future, thanks to a massive price hike and the shortage of product. In Ontario, in July 2000, prices jumped a whopping 60 per cent. A 750 ml bottle of Sauza Hornitos now sells for $52. Cdn. Herradura blanco jumped from an already-hefty $38.50 to over $60 in one day. Popular mixtos like Jose Cuervo Special now sell for $35 Cdn. The price increase was explained by printed notices about the “worldwide tequila shortage” placed on the shelves. And prices are expected to continue to climb as the shortage continues.

Tequila is now priced in the stratosphere previously populated by single-malt whiskeys, cognacs and a few premium liqueurs. Of course, the provincial agency could have alleviated the impact by dropping its tax level somewhat, but that expedient never seemed to occur to anyone in any liquor board administration. As in Mexico, tequila in Ontario is now priced outside the budget of most average workers. Getting buyers to mature from mixtos to premium products is far more difficult at the current prices.

The story is similar across Canada. I have confirmed price hikes in Quebec, Saskatchewan, Alberta, Prince Edward Island, British Columbia, Nova Scotia, and Ontario this summer.

Tequila is still very much a niche market drink in Canada. Approximately 210,000 12-bottle cases of tequila are consumed across the country every year. Compare this to American purchases of 7 million cases. Mexico itself only consumes 6 million. Global consumption is 14 million cases a year.

The LCBO sold 663,000 litres of tequila in the previous fiscal year (April 1 1999 – March 31 2000) – about 1.4 per cent of total LCBO sales. Half of that was sold to bars and restaurants. That year saw an increase of 18.4 per cent in sales over the previous year, but any future growth will be seriously derailed by the price increase. By comparison, the LCBO sold 18.5 million litres of whiskey over the same period – 40 per cent of all LCBO sales. Vodka represents 20 per cent, and rum 16 per cent. Both, I note, originated in countries with climates similar to ours.

In British Columbia, tequila sales have been rising steadily, from 328,000 litres a year in 1996 to 400,000 in 1999 – an increase of about 22 per cent. There has also been a rise in demand for premium tequilas there and the available product line has improved over the past two years. BC is more influenced by the cultural habits of the US – notably California – more than any other part of Canada, and thus follows trends more closely than other provinces may.

As for mezcal – Canadian consumers seem singularly uneducated about mezcal. One can sometimes find a bottle of Monte Alban on the shelf of an urban LCBO outlet. Dos Gusanos was also imported at one time, but appears to have been dropped. Forget anything premium like Del Maguey – at least until the buyers are convinced of its quality. Even then, it will likely only appear in the urban stores in the Vintages section – the area reserved for premium and expensive brands. Some provinces do not even stock any mezcal products on their shelves. Mezcal sales are generally insignificant, even when compared with tequila sales.

What does the future hold? It may look dim for tequila aficionados in the cold north, but there is a glimmer of light. Slowly consumers are becoming educated about tequila and sales figures rose steadily until the price increases. It has been difficult to jump the hurdle of myth and urban legend, to unravel the tales of bad tequila experiences so consumers are open to new adventures with premium products. But the change is coming – in part due to an increasing number of Canadian snowbirds taking their winters in Mexico, where our dollar stretches further than in the USA. They come home with a better appreciation of tequila, and sometimes mezcal, to impart to friends and family.

In some urban areas like Toronto and Ottawa, bars are starting to stock premium brands on their Or perhaps its our innate conservatism that eyes with suspicion anything exotic or different, own. Thanks to distributors like Toronto’s Andrew Toplack, word is getting out that there are better products available.

The media is helping, too. Almost an unknown word in Canadian media for decades, stories about tequila are starting to appear. This summer alone, I was interviewed twice on CBC Radio about the agave shortage and the crisis in tequila. Andrew Toplack was interviewed in the Toronto Sun this summer about premium tequila. Also this summer, Lance Cutler, author of the Tequila Lover’s Guide to Mexico, had an article about the spirit in the LCBO’s glossy, widely- distributed Food & Drink magazine. So there is hope we can yet educate the consumer, despite the prices.

I live in a small town of around 16,000. I like to boast we have the highest percentage of educated tequila drinkers in Ontario. That’s because of the tastings I’ve organized for friends and the local media. In the past two-and-a-half years, I’ve brought in roughly two- dozen different brands of 100 per cent agave tequila, plus seven different mezcals, including five Del Maguey brands. After the tastings, I give away several bottles to the participants, so they can pass along the experience to friends and relatives. A couple of local bars now stock a bottle of 100 per cent agave tequila beside their regular mixtos – just in case any of our group drops in. We’re small, but we’re dedicated and we’re spreading the word as quickly as we can.

Author, editor and writer, Ian Chadwick is well known for his exhaustive website on tequila and mezcal: In Search of the Blue Agave found at www.georgian.net/rally/tequila. Ian is alsorunning for council this fall in his hometown in Ontario, Canada.