As gas prices reach multi-year record highs in Metro Vancouver, B.C., and Canada, even more industries are feeling the effects.
B.C.’s wine industry members are expecting a massive hit to their bottom line ahead of their busiest time of year.
Much like grocery stores, wineries are also seeing fuel surcharges push costs for shipping everything from bottles to capsules to printing costs and fertilizer.
Gas prices have been increasing around the globe since the onset of the U.S. and Israel’s attacks on Iran and disruptions to traffic in the Strait of Hormuz, curtailing the flow of millions of barrels of crude each day.
Jeff Guignard, CEO of Wine Growers British Columbia, says wineries are already worried as the effects of fuel costs start to trickle down to other things they rely on.
“We’re hearing from some suppliers now that are already indicating double-digit increases in some of their prices,” said Guignard.
“We don’t know how long the war in Iran is going to last, but we’re already seeing direct consequences of it. And at the end of the day, it’s just going to mean increased prices for consumers and increased cost of businesses.”
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He says suppliers are telling wine growers to lock in prices now.
Ballooning fuel costs are also impacting the cost of running farming equipment.
“Even when you’re running tractors and all that other equipment on your farm that require gas, it costs a whole lot more,” Guignard said.
“And you can imagine from your individual cost of driving your car, now imagine you’re running a fleet of tractors, facilities. These are tens of thousands of dollars extra.”
Wineries, big and small, are seeing the impact on their balance sheets, Guinard says, while their customers balk at higher costs.
“But when you now have this sudden price shock that goes through the system, it screws up your annual plan,” said Guignard.
“You had planned to position products in the market in certain places, restaurants, retailers, direct-to-consumer wine shipments, and you had certain price points, your plan for that. Now you’re having to go back and read your books. And the harsh part of this is there’s no end in sight.”
–With files from Maria Vinca.