Importing for Pleasure and Profit

A primer on the ins and outs of selling that wonderful Chianti you discovered in Tuscany after you return home

PICTURE THIS: You’re vacationing in Tuscany and as you drive lost in the hills somewhere between Florence and Siena you happen upon a hilltop village with red-tiled sandstone houses and cedar trees. You come across a small cantina whose sign reads, Degustazione di vini.

You’ve picked up enough Italian to know that you can taste wine here. You enter the cellar and the proprietress pours you a glass of her Chianti Classico Riserva. You love the wine. You want to buy some on the spot to carry back in your suitcase.

No, better still: you want to order cases and introduce it to your friends. Maybe even start a little hobby business, importing this delicious wine you’ve discovered for colleagues, friends and family.

How do you go about it? Well, my advice would be to take a seminar conducted by Charles Steven Trenholme, entitled “Importing Wine, Craft Beer and Spirits for Pleasure & Profit.” Trenholme has been importing wine into Ontario for almost 40 years and has presented this seminar twice a year since 1992.

I posited the above scenario to him and asked how our vacationing lawyer would go about importing the wine for home consumption or even starting an importing business based on the wine discovery. (We’re using the Liquor Control Board of Ontario here as the model.)

“If the goal is to bring it back for friends, the easiest route would be to place a Private Import Order,” says Trenholme. ”As a private individual you are allowed a maximum of five cases of any wine [to import]. All you need is the winery’s contact information. The Liquor Board’s Specialty Services Department would get the pricing from the winery, determine whether the winery is prepared to ship and instruct them on the technical and logistical details.

“You would have to put down a 25-per-cent deposit of the calculated landed value of the wines,” Trenholme says.

“The Board would place the order and, when the wines arrived, they would be subjected to a lab analysis. The supplier is charged $200 for the lab analysis and this amount is deducted from the supplier’s invoice to the LCBO. You can waive the need for a lab analysis, though by so doing you absolve the LCBO of any liability concerning the condition of the wine.”

However, says Trenholme, if this wine-loving lawyer decided he wanted to get into a hobby business of importing the wine, he would have to first determine if the winery already had an importing agent.

He would then have to present the liquor board with a letter of agreement between himself and the winery “that they have contracted you as their importing agent in Ontario or any other province. You would then obtain a licence from the appropriate provincial authority [in Ontario, $35 for a two-year renewable licence] to represent the winery and then you could make offers to the liquor control board of this wine.”

Pricing your wine: The ex-cellar price quoted by the winery is subject to freight and duty. To this figure the LCBO adds its 75.5-per-cent markup, plus a handling fee of $14.50; then, an 80-cent-per-bottle environmental fee, a glass levy of five cents per bottle, and finally HST. If you take the supplier’s quote and multiply by 200 per cent, you’ll get close to the figure you wish to charge per bottle.

“You could be looking at LCBO orders of anywhere from 300 cases to 1,000 cases, depending on the wine and the availability from the supplier,” says Trenholme. “Let’s say the cantina had an allocation of 50 cases and Vintages rejected it because it wasn’t sufficient stock for them to merchandise. You would have to canvas friends and restaurants and get a commitment to buy. Then you put the order in and the liquor board will facilitate the order through Specialty Services.”

Agents work on commission, Trenholme notes, so there’s one built into the price at which the supplier sells the product to the liquor board, generally 10 to 15 per cent on top of the supplier’s net export price, with “some promotional allowance” possibly added.

Ordering 50 cases means one would have to pre-sell it. “You’ve ordered five cases initially, so take one case and invite all the partners in the firm to come into the boardroom and taste the wine and then convince them to buy a case or two. Get them to sign some forms, pay the deposit and take all that paperwork to the LCBO or SAQ and they’ll communicate with the supplier.”

On the upside, as a registered agent you can write off some of your international travel and wines that you buy. The people who own wineries are, in general, very hospitable and very generous. So, you’d be entering an amazing world.

Tony Aspler is the author of 17 books on wine, including his latest, Canadian Wineries.