Magnotta Winery Q2 sales fall to $529K; sales revenue almost unchanged at $8.7M

VAUGHAN, Ont. – Magnotta Winery Corp. (TSX:MGN) has blamed an Ontario government tax for an almost $100,000 drop in second-quarter net earnings.

The wine producer said net earnings in the three months ended July 31 were $528,936 compared with $621,064 in the same period last year. Per share figures were not disclosed in the company’s news release on its earnings.

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Gross sales were almost unchanged at just under $8.7 million. However, net sales – those retained by the company after alcohol consumption taxes are paid – decreased to $6,060,581 from $6,126,302.

“The decrease in net sales and net earnings is a direct result of the 10 per cent cellared in Canada consumption tax introduced by the Ontario government on July 1, 2010,” Magnotta said.

“It is payable only on CIC wine product sold outside of the Liquor Control Board of Ontario in all Ontario winery retail stores.

Overall gross profit margin for the quarter decreased to 37.7 per cent from 40.1 per cent in the prior-year period, mainly due to increases in raw input costs as well as the CIC wine tax, Magnotta said.