Castlegar News _ october2, 1985 Economy increases OTTAWA (CP) — Led by thé first increase in motor vehicle parts manufacturing this year, the economy grew at a-healthy 1.0 per cent in July, compared with a 0.7- per-cent increase in Jun Statistics Canada said Tues- day. Gross domestic product, which measures the value of all goods and services pro- duced by Canadians, increas- ed to anannual level of $157.3 billion in July from $155.8 billion in June, the govern- ment agency said. The fig- ures are in inflation-adjusted 1971 dollars and have been adjusted for_seasonal varia- tions. Since the beginning of ie year, GDP has increased 2.8 per cent, slightly less than the 3.0-per-cent ‘growth for the same period last year. For service-producing indus- tries, growth forthe first seven months of 1985 was 2.5 per cent, compared with 2.7 per cent'in 1984. For goods- producing industries, produc- tion has increased 3.3 per cent, compared with 3.6 per cent. in 1984. Motor vehicle parts manu- facturers: saw their output increase 14.8 per cent in July after six months of declines. Statistics Canada said output in this sector is still slightly below January levels. Manufacturing production, which includes motor vehicle parts, grew 2.4 per cent in the month, following a 1.5- per-cent increase in June. Gains were widespread, with motor vehicle and motor ve- hicle parts production ac- counting for almost 40 per cent of the increae. Construction also recorded a strong gai mainly as a result of an advance in resi- dential building. Construc- tion output has grown for five consecutive months to record an overall gain of 9.2 per cent. | Utilities output rose in July due to increases in both “estate agencies, electric power” utilities and gas distribution., Production by electric power utilities had been relatively flat for “the first. six molnths, of the year. ‘Among. service-producing “industries, growth was re- corded in insurance and real telephone systems, security brokers and dealers and retail trade. The gain in retail trade offset the loss in June, to leave output at about the same level as in May. Ted Carmichael, an econ- omist with the C.D. Howe Institute in Toronto, says the Canadian economy has been outperforming the U.S. econ- omy for most of the year. “One-per-cent growth for July~has~to-be-even- better than most people would have expected,” he said in an interview. Carmichael said that the slowdown in the U.S. econ- omy has hurt Canadian ex- ports, but domestic demand has picked ‘up, teeulting inan increase in investment and construction. “We're getting better bal- ance in our economic growth right now,” he said. “In some ways this is just a catching up with the strong U.S econ- omic growth in 1984.” While he was pleased with the output of motor vehicles and motor vehicles parts manufacturers, _ Carmichael cautioned that production in that industry tends to fluc- tuate from month to month. The strong gains in July. do not necessarily make a trend, he said. Giles Rheame, an_econ- omist with the Conference Board of Canada, said the automobile manufactures had ~not- been-increasing- produc- tion in the first half of the year and were depleting their inventories to meet de- mand. With demand still strong, they will have to increase production, said Rheame. Mining industry improving VANCOUVER (CP) — In- creased productivity is help- ing to offset the economic downturn that has plagued the mining industry in Brit- ish Columbia- for—the last three years. Asaresult, most mines are it's a dollar here, $100,000 there.” Among ‘improvements adopted: by the mines are computer-controlled truck dispatching systems and computerized mills, said Ene- mark. cia) One ion has installed at pr levels but with the same. or smaller workforce. And although prices have slumped for most metals and coal, the mines that are still operating are turning a profit or are close to breaking even. Higher productivity is the reason, says Tex Enemark, president of the Mining Asso- ciation of B.C. “For example, despite higher taxes and other ex- ithe mining industry "Fedee “the cost of producing a pound of copper by 10 per cent,” said Enemark. “It's no one thing, a sealed flotation system that saves about $750,000 a year on chemical costs and leach- ing techniques have been im- proved throughout the in- dustry. while the number of em- ployees in that operation was cut by 170 during the year. The Valley copper mine near Ashcroft reduced operating costs by 3.6 cents a pound. ~--.Anderson also said Com- inco, the largest mining oper- ation in the province, re- corded productivity gains at three. other mines. George Albino, the chief executive for Lornex Mining Corp., told shareholders that increased production of cop- tivity throughout ~ -the~-com: Cominco chairman Norman. per, coal and molybdenum 1984 first-quarter profits. Tony Petrina, president of Gibraltar Mines Ltd., a sub- sidiary of Placer Develop- ment Ltd., said the mine in- stituted cost-cutting plans in 1982. “It. is remarkable that Gibraltar is in essentially a- break even situation when the price ‘of copper is at its lowest price in real terms in the last 50 years,” Petrina said. He said that while Gibral- tar's operating costs FERRARO'S © a Western Canadian Company "YOUR SATISFACTION . IS OUR MAIN CONCERN. eu 2 CONVENIENT LOCATIONS TO SERVE YOU * CASTLEAIRD PLAZA * DOWNTOWN Until 9 p.m. Thursdays and Fridays. Prices effective until Saturday, October 5, 1985 Government inspected Canada utility ° frozen young turkeys (3-8 kg sizes) (6.6-17.6 Ib. sizes) 2.62 kg *each filled Super Saver Card may be redeemed for ~ $1.00 OFF the Sarai price of Canada Utility frozen’young turkeys t Meech turkey) bey 5 filled cards u could purchase a Yolb. (4.54 kg) utilit frozen turkey for only 1.52kg.......b. @ Great Price cut from Canada Grade A beef outside round steak roast - 1.99 Seafood © Seafood Seafood @ frozen pink salmon Pi whole * head off 2-4 Ib. avg. 3.70 ks baron of beef 4.39 kg Anderson said in the com- contributed to the pany's latest annual report profit of $5.26 million in the that the return to profitab- first quarter of this year, a ility was a result of generally | sharp rebound from the $2.9 improved markets for metals million loss in the year- and fertilizers and from the earlier quarter. Albino said cost controls, the proj mining rate of 40,000 tonnes of ore a day was exceeded by an average of 7,000 tonnes at the mine. Equity Silver Mine, Pla- cer's only other operating No.1: . 7 + Government mencors Bore ° fresh pany's t increase to 7.8 A record amount of zinc Minee tons in tonnage milled was produced at Trail in 1984 contributed significantly to ed Way mine in the province, is also making strong productivity gains. regular cut 5.25 ks basket -) a ) G With One Filled Super Saver Card Offer Good Thru Oct. 5/85 2.38 } j i | s October 2,.1985 cl RHOSP Ask us! High yield. Conversion options.’ By WENDY ECKERSLEY TORONTO (CP) — Jan Westcott wouldn't feel quite so bad about Canadians drinking imported wine if more of the imported stuff was good stuff. But, says the executive director of the Canadian Wine— many—Gi i wine i ic about their found taste for the grape but more impressed with labels than substance — will choose an imported bottle of so-called vin ordinaire over a similarly priced high-quality domestic. “The grony is that the (imported) wines that are competing with us are not the good wines,” he says. Instead, they're the “co-operative” mass-produced wines shipped from France and Italy that lack any distinctive taste and are often of uneven quality. But that doesn’t seem to deter-Canadian drinkers, who continue to favor imports over domestic products as they lay out $1.5 billion a year for wine. In 1984, Canadians bought 11,283,090 12-bottle cases of domestic wine, compared with 13,893,246 ca: imports, Westcott said in an interview. WINE BUBBLES In fact, it is the imports that are keeping. Canadian wine purchases on an upward swing of just over three per cent a year while liquor is losing ground and beer is managing only to hold on to its status quo in the drink market. For example, said Westcott, sales of French white table wine in Canada skyrocketed 41 per cent last year, while Canadian white wine sales gréw only three per cent and the overall domestic sales volume actually declined more than 2¥/ per cent. Embarrassed and dismayed over a market where French red wines also outpace domestic reds, wine producers are lobbying for more protec of Canadian on and tax Canadians favor imported wines breaks, hurrying to refurbish vineyards with French hybrid grapes, and trying to tempt domestic taste-buds. “We would like our domestic products to get better tax treatment, and if not that, let’s put import quotas on,” Westcott suggested. 7 —____No.other-countries allawe imported_vin ordinaire to. displace their domestic wine industry,” he added. ““We need more time to get the industry in gear, heading toward the dry table wine market, but it takes five years to develop grapes. If there's no nurturing (of the industry), we'll be exporting jobs to Europe.” SUBSIDIES IN EEC Between the federal and provincial governments, taxes hit domestic wines at a rate of more than 50 per cent. At the same_ ee members of the European —E mi Ce to__wine producers to $1.4 billion i in 1984 from $600 million in 1982 and $60 million in 1978. “Those subsidies. allow them to bring their.wine in here at an incredibly low price,” said Westcott. “There's no way Canadian industry can do battle with the state governments of Europe.” And yet, he said, when the Ontario government tried :o help out by imposing a 65- cent-a- bottle tax on imports, the United States — to the General Agreement on Tariffs and Trade to force the removal of the. tax. “We got squeezed,” Westcott said. “But every time Europeans hiccough Canadians shake in their boots.” MOST IN ONTARIO More than 80 per cent of the domestic wine industry is based in Ontario, where four of what Westcott calls the five major companies are located. T.G. Bright and Co. Lid., Andres Wines Ltd., Jordan and Ste-Michelle Cellars Lid., and Chateau Gai are all in the verdant Niagara —u Peninsula, while the fifth, Calona Wines Ltd., is near Kelowna, B.C. Overall, there are some 50 wineries in the country, many of them springing up in the last 15 years and many of those in British Columbia, now pushing hard for a toe-hold in the Ontariodominated market. Westcott makes no excuses for Canadian wines. “The experts say the Rieslings we're producing here are as good as those from Germany or South Africa,” he said. ur wine has unique’ characteristics. It's | not inferior. aN RETAIL SALES NOT WHAT IT ~ USED TO BE Editor's note: The typical post-Second World War shopping scene, where a family patronized the nearest I grocery store and spent much of its disposable income at department stores, has passed. The following story, the first-of three, examines the changing face of the Canadian retail i It's a long way from the typical post-Second World War shopping scene in which the family would only patronize the closest supermarket and spend much of its disposable income at department stores, says Cowan, and the results can be seen in the financial results of those operations that did not adapt. In 1979, Hudson's Bay Co. made a record $80.3-million profit but’ by 1982 that had been transformed into a $122.1-million loss. Its 1984 deficit of $107.4 million wasn't much better. CUT STAFF In an effort to achieve a turnaround, Hudson's Bay has pruned staff in many of its operations — laying off more than 2,200 people.at Simpsons alone last_year — as well as shuffled its team, turned more than EASY TO SELL British wine no joke By PAUL MAJENDIE_ a BIDDENDEN, ENGLAND (REUTER) — You can buy it at Harrod’s or drink it at the Ritz: English wine, once the butt of jokes, now wins international tasting competitions. The cottage industry used to be the exclusive domain of gentlemen farmers dabbling in their favorite hobby. But today's winemakers have greater expertise, the vines have matured and techniques are much more from the Tropics © tropical California grown. © Canada no. 1 golden ripe large By ROBERT McLEOD TORONTO (CP) — Shrewd shoppers speeding off in a dozen Bay stores into no-frills Zellers operations and embarked on a program at Si in ‘Toronto. sophisticat This year’s sodden English summer has not been kind to er their-BMWs-from-#-ritzy-boutiq: the winegrowers, but the last three seasons were — each | Iti across town for-a-door- contributing to rasher-speciat-on-detergent the widespread « are changes _ i ts-poli i p the high mark-up goods like fashion and cosm _produced_a_ bumper crop and annual. _production—reae! three billion bottles. P g—tess: =Typical—of—the-new—breed—of -English- -is—| == bananas One Check “Goes a Long Way Give generously when a canvasser calls on you. “REMEMBER — Wed., October 9 Is Blitz Day Our goal is $60,000 UNITED WAY DAY AT PHARMASAVE On Saturday, Oct. 5, when you shop at Pharmasave, downtown Castlegar — a percentage of your money.will go directly to United Way. United Way Volunteers will bag your the kids balloons and inform you of their organization. “People ietpiing Propie™ purchases, give por Your Community Through 25 Agencies 1.52 ks Clover Leaf pink salmon _99 With One Filled Super Saver Card Offer Good Thru Oct. 5/85 Heinz ace ketchup 2.49 With One Filled Super Saver Card Offer Good Thru Oct. 5/85 Tk bottle 213g tin J.B. © frozen concentrate Orange juice 1210.49 Aylmer tomato soup si 248.49 284 ml tin pak Oventresh (5-454 g) or Ferrwood * SPECIAL Wye ; unsliced © white ¢ 80% whole wheat Robin Hiscd © all purpose economy bread flour: ae 2 Filled Super Saver Cards tity Thru Oct. 5/85 “Store designs are being revamped, companies are ing-hands,— ny fighti a i vod is_in the process of selling off it real estate assets. It Richard-Barnes,a_blunts a mer_w! Seven-hectare vineyard nestles ina aioe ‘sheltered-valley— ighting. the game and the younger upstarts have become a force to be reckoned with. The stakes are high — Canada had approximately $116 billion worth of retail sales in 1984 — but some companies have been finding it difficult lately to get their share of the market. “Twenty years ago, life was definitely easier for Canadian retailers,” for Clayton Research Associates. “The margins were higher and the competition was not as vicious. It’s become a professional’ 's game — there's no room for the amateur.” ‘Department stores have lost gr d toind dent outlets and specialized chains’ Department stores have lost ground to independent outlets and the chains specializing in clothing, furniture and hardware. The result has been huge losses for companies like Hudson's Bay Co., which operates The Bay. Simpsons and Zellers department stores. In the grocery retailing business, former market leaders like Dominion Stores Ltd. have fallen prey to a rejuvenated Loblaw Cos. Ltd., and Canada Safeway has retreated toward its western stronghold. Everywhere, the giant warehouse stores as well as food and drug combination outfits are drawing large amounts of business. The reasons for the changes are numerous. One factor, experts say, is the aging generation of baby boomers who are much more choosey than their parents and are not afraid to pay for quality. = *“They won't just take stuff off the shelves,” says Winter. “But if the goods Fave the right style, they're willing to pay the price.” MARKET FRAGMENTED At the same time the market fragmented. “The warehouse food stores appeal to the budget-conscious — people who are willing to drive extra distances,” says retail analyst Ross Cowan of Levesque Beaubien Inc. of Montreal. “At the other end, you're getting upscale fresh fruit and vegetables stores springing up. which are very successful.” To coniplicate matters, traditional retail demarcation lines are breaking down. “There has been a splintering of groups, particularly Is. You will find upp people in Zellers and Biways to get their everyday necessities at the best price yet they will still shop for clothing at Creeds and Holt Renfrew.” has become says John Winter, senior associate ~ needs the money to help revitalize its outlets in Alberta and British Columbia. Ironicatly,- the department storés have contributed to their own downfall by embracing the move to shopping malls that began in the 1960s. “Once you go to a mall you can do almost all your shopping outside the department stores rather than inside them,” says Winter. “The department stores set up the competition because to have an effective mall you need your specialty stores.” PROFITS HUGE The department stores’ losses. have meant substan- tial gains for the specialty stores and chains like Dylex Ltd. of Toronto, which operates Fairweather, Suzy Shier, Tip Top, Harry Rosen and others, and Grafton Group Ltd., also of Toronto, operator of The Loft women’s wear departments, George Richards Kingsize~Clothes Ltd., Apparel Clearance Centres and Maher Shoe stores. Dylex racked up $31.4 million in profits in 1984, nearly double the figure earned a year earliler and up almost 400 per cent over the company’s typical earnings in the late 1970s. _“The specialty stores have done a much better job of picking a market niche and focusing on it as well as. offering improved customer service,” says Gowan. “Companies like Dylex have had a much more flexible and _ sharper management approach and better identified what the-consumer wants.” Nowhere has the merchandizing business been more cut-throat than in the grocery trade, where companies are adopting a variety of strategies to make the most of limited profit margins. For some, the solution has been to retreat to the area of the country they know best. Canada Safeway Ltd. of Winnipeg recently sold- its supermarkets’ in southerm Ontario to Toronto-based Oshawa Group; Steinberg Inc., of Montreal closed its’ Valdi outlets in Western Canada; and Dominion Stores Ltd. had pulled out of Quebec and Western Canada before most of its best supermarkets in Ontario were sold to the A and P chain. For many, the superstore concept appears to hold the key to future prosperity. While Loblaw was the first to refine the concept of creating supermarket warehouses — giant grocery stores — other companies have joined the movement. Many are doing a tremendous business. However, Loblaw has taken the idea a step further with its super-combination stores, which have large drug and hardware sections as well. It is building five such outlets in Winnipeg. two in Saskatoon and two in Edmonton, and more are planned. in the picturesque southern county of Kent. “English wine is very easy to sell now,” he said in an interview at his prize-winning Biddenden vineyard. “People ask for the wines by variety. Quality is the reason for the breakthrough. Continentals like coming here to taste the wine.” IMPROVE TECHNIQUES Barnes, who sells over half his wine to cistomers who come to the farm gate, said: “This country will never have a wine-growing area like on the (European) continent. But there are a lot more vineyards being planted. Wine-making has improved every year.” The wine giants of France and West Germany certainly have no reason to be trembling in their grape-treading boots. Less than 400 hectares of British farmland is being _cultivated by vineyards compared to 1.2 million hectares each in France and West Germany. Barnes, whose gentle slopes are sown with early ripening German grape varieties, argues that quality in England makes up for lack of quantity. “If- you put our wines up against some German wines and cover the labels, we usually come out on top.” Last year the magazine What Wine pitted wines from 24 countries against each other in a blind tasting competition _judged by wine experts. British wines finished first and secdnd. QUALITY CRUCIAL England's 300 vintners, deprived of the tax and quantity production advantages of their European rivals, realize how crucial it is to produce a high quality product. Each bottle costs $1.30 more than the French or German equivalent. “We feel we ought to have a preferential rate of duty,” Barnes said. “A third of.our bottle price goes to tax.. What the French and Germans pay is negligible compared to what we pay.” Setting up a vineyard is also a very capital-intensive project. You have to buy your land, plant the vines and then fence, post, wire and tend them for up to eight years before getting a decent return for your money. Barnes is also quick to point out, “There are no government subsidies or grants to help put up a vineyard or improve it.” _ Despite the great strides it has made in the past decade, Britain's fledgling wine industry is still in its infancy and is recognized as such by the European Community. RCE STANDARDS In 1980, the Community said it would take 10 years before English wines could be assessed for the official These developments are leaving ‘the traditional supermarkets in the dust. NEXT: Reselling Simpsons ” tag which grades quality. For now, they are Seed as “table wines.” ‘The English Vineyards Association, started arid run by the country’s. vintners, enforces its own standards. A —nerve-wracking autumn: IT'S PRICEY . . . Despite the fact British wine cost $1.30 a bottle more than its French or German equivalent, the wine still sells well. | . healthy sense of competition is injected by an annual contest to name the English wine-of-the-year. Barnes, whose fruity Ortega white wine has won the gold medal two years in a row, produced 90,000 bottles of wine in a bumper crop last year. But this summer has been chilly and rain-soaked and the philosophic Barnes, gazing at the grapes that could make 1985 a disaster year, commented as he headed into a even ripen.” Still, three good years in a row have been a great comfort and he said: “We have got stocks that will keep us going through to the next vintage.” SMALL BEAUTIFUL A believer in the adage “small is beautiful,” Barnes stages wine-tasting evening tours at his vineyard in June and July. “l introduce people to the wine and let them taste it,” he said. “My time is better spent doing that than wasting money on advertisements.” Typical of the newly found self-confidence of the English wine industry is a cheekily organized wine run to Paris from the English Wine Centre in Alfriston, southern England. jicking the great rush to get.the first bottle of Beaujolais over:to Britain every year from France, the English vintners in conjunction with a motoring magazine now stage a light-hearted rally to see who can get English wines fastest to Paris. : - : “I wouldn't like to say they would.