Ice wine, Canada’s distinctive contribution to the world of wine, holds a fascinating place in the world wine price tables and so qualifies for inclusion in The Wine Economist’s extreme wine series.

Top of the World

Which country gets the highest average price for its bottled wine exports? You might think it would be France with all those expensive Champagne, Bordeaux and Burgundy wines or Portugal with its costly eponymous after-dinner wines. But both of these countries also export a good deal of much cheaper wine, bringing their average  export earnings (USD per liter) down to $4.24 and $3.70 respectively. (Data are for 2005 from my copy of The Global Wine Statistical Compendium.)

New Zealand with its gorgeous Pinot Noirs and Sauvignon Blancs ($6.64) and the UK with its classy sparkling wines  ($6.87) both earn more per liter of bottled wine exports than the “usual suspects” of France, Germany, Italy, Portugal and Spain to say nothing of New World powers Argentina ($1.87), Australia ($3.65), Chile ($2.72) and South Africa ($2.42).

(Remember that wines that are exported for, say, $4.00 will have a much higher price on your store shelves due to transport  costs, distribution and retail margins and applicable taxes.)

At the very top of the table, for reasons that I think are due to exchange rate sand import resales more than domestic wine prices, is Switzerland ($8.23 per liter) followed closely by Canada ($7.32).  How can frigid Canada rate so high? Ice wine (or Eiswein) , of course!

The Highest Compliment?

Canada didn’t invent ice wine (credit Austria with that) but it is the world’s largest producer of this chilly wine, making nearly a million liters in a good year according to John Scheiner’s authoritative The Wines of Canada. Ice wine’s high cost is the biggest single factor in Canada’s lofty export earnings average.

Tiny bottles of ice wine bring enormous prices — $50, $100, even $500 and more for a half bottle at retail. Who pays these spectacular prices? Japan and other Asian countries are the largest export market.  Ice wine is the quintessential high end gift wine — attractively sweet, beautifully packaged and luxuriously expensive. Tourists snap bottles at Duty-Free to take home to Asia.

I’ve heard that so much ice wine is bought by Tokyo-bound travelers that some Canadian duty-free stores have special bonded facilities in Japan to make purchases more convenient. Pay at the airport in Canada and pick up your ice wine at baggage claim in Japan. Sweet!

Ice wines are so expensive and sought after in Asia that counterfeiting is a serious problem. Some experts believe that as much as 50 percent of the ice wine sold in Taiwan is bogus — sweet wines from Canada and elsewhere that are doctored up and repackaged.

Check out this image from the label of one of the faked wines — brewed, not fermented! Yikes. Must have got ice wine mixed up with ice beer. These may be big counterfeiting operations, but not necessarily sophisticated ones.

A recent Globe and Mail article suggests the problem may be even worse in China.

Well over 50 per cent of icewine in China is fake from what I’ve seen and heard,” said Allan Schmidt, president of Vineland Estates, which has quit the market entirely. “If it was 80 per cent … I wouldn’t be surprised.

The legitimate Chinese market for Canadian icewine has grown rapidly, which the industry attributes to a burgeoning middle class and the desire to give exotic gifts. It rose to $2.16-million in 2007 from $270,000 in 2005. The market sagged in 2008, but was worth $1.2-million in the first half of this year [2009]. It’s our most important flagship wine produced,” said Bob Keyes, vice-president of economic and government affairs with the Canadian Vintners Association.

Chilly Saga, Intense Experience

Ice wine is a very particular product. The grapes for ice wines are left on the vine long after regular grapes have been picked. By law natural ice wine in Canada can only be made from grapes that have been frozen to -7 degrees Celsius (17 degrees F) and harvested at minimum 35 degrees brix. The juice, what is left of it, is highly concentrated so each grape yields just a drop or so. Picking is done by hand, of course, since many clusters will have experienced bird damage or fallen prey to disease.

Vidal Blanc is the grape of choice for Canadian ice wine — its tough skin can stand up to harsh weather — along with lesser amounts of Riesling and other varietals. Most of Canada’s ice wine is produced in Ontario, where wine makers can pretty much count on frightfully low temperatures early in the winter season. But the first ice wines came from out west in British Columbia.

North America’s first commercial ice wine was made in 1978 by German-born Walter and Tilman Hainle of Hainle Vineyards Estate Winery in Peachland, British Columbia. Tillman Hainle, Walter’s son, generously shared precious bottles of a recent vintage from with us at the 2008 Riesling Rendezvous meetings. [See Tilman’s helpful comment below.] It was one of the most memorable wines I’ve ever tasted, so I just had to visit Hainle Vineyards on my recent Okanagan wine country expedition.

Sue and I met with Dr. Walter Huber, the proprietor of Hainle Vineyards and Deep Creek Wine Estate, who purchased the business from the Hainle family after Walter’s death.  Dr. Huber was an extremely generous host, pulling corks with almost excessive enthusiasm. He’s refuses to release his wines before their time, choosing to let them dribble out slowly to lucky wine club members. He is generous to a fault with inquisitive visitors like me, even letting us sample an ice wine from 1984. Wow! I purchased some old vine Rieslings to drink a few years from now when they have fully matured.

Only the Beginning

Ice wine is what made Canada’s reputation in wine, Dr. Huber explained, but it’s not all there is to Canadaian wine these days, especially in the Okanagan Valley in eastern B.C., where the vineyards overlook Lake Okanagan and dozens of very different micro-climates co-exist. Winegrowers are able to ripen cool climate grapes like Riesling and Pinot Noir, of course, but also Cabernet Sauvignon, Merlot, Syrah and apparently even Zinfandel!

I love ice wine, but it is only one element of Canada’s dynamic wine industry. I’ll report on the surprising wine tourism industry in my an upcoming post, followed by a peek at what might be the future of Canadian wine. O Canada, you produce some unexpected wines! Check back soon to learn about what’s happening today and what the future may hold.

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[Note: This post is part of an occasional feature on extreme wines. Extreme wines? You know, the cheapest, the most expensive; the biggest producers, the smallest; the oldest, the newest and so forth.]