The legislation of wine brand identity is a growing concern for producers worldwide.
When Fred Franzia, the maverick winemaker at the helm of Bronco Wine Company (of “Two Buck Chuck” fame) sold his Central Valley-sourced and -produced wines under the Napa Ridge and Napa Creek labels, he ruffled some feathers, to put it mildly. Napa Valley grape growers and vintners talked of piracy and deception; after all, the reputation of their prized region was at stake.
Growers quickly organized themselves and began legal action against Franzia and Bronco Wines. Napa Valley Vintners (NVV), a nonprofit trade organization representing more than 300 members of the region’s winemaking community, spearheaded the effort—and ultimately prevailed, despite vehement opposition from Franzia and his legal team. Many years and appeals later, Franzia was forced to stop production under the misleading labels.
According to NVV, the case is of utmost importance because it deals with the misrepresentation of a product and the duping of customers. More important, they say, it’s about “protecting the integrity of the Napa Valley name.” NVV takes its job very seriously; the group describes itself as “the sole organization responsible for promoting and protecting the Napa Valley appellation as a winegrowing region second to none in the world. Respect for our history reinforces our commitment to the preservation and enhancement of the Valley’s land, wine and community for future generations.”
Without a doubt, when it comes to wine, place matters. Winemakers and afficionados hold dear the concept of terroir—that the unique outcome of a wine is a direct result of the characteristics of the region or vineyard in which the grapes are grown.
Andy Beckstoffer, president of the Rutherford Dust Society, a smaller nonprofit group that exists to promote Napa’s Rutherford subappellation, says “terroir is all aspects—soil, climate, elevation, latitude, air quality—where the total is more than the sum of the parts. That’s what makes Rutherford such a special little place on earth. You can go three miles north or south and it’s totally different. So it’s extremely important to promote and protect the appellation, not just the brand.” Naturally, the most effective means of protecting something is through legislation.
A brief history of wine law
In 1981, the establishment of the American Viticultural Area (AVA) program marked the first significant step in the legal protection of wine brand identity. Then governed by the Bureau of Alcohol, Tobacco and Firearms (ATF), and now by the Trade and Tax Bureau (TTB), an AVA is defined by its geographic area, or appellation. Not all recognized appellations have been granted AVA status, but a majority of them enjoy this distinction. Some AVAs encompass other smaller AVAs (known as “subappellations”). Napa Valley, for example, is an official AVA, but so is Rutherford, an appellation wholly within the Napa Valley boundaries. In fact, Napa Valley is currently composed of 17 smaller subappellations.
The important federal governing principle, however, is that for a wine to claim an AVA on a label, at least 85 percent of the grapes used in that wine must have been grown within that AVA’s defined geographic boundaries. Even if a region isn’t an officially designated AVA, federal law still requires that at least 75 percent of the grapes used must be grown within any region claimed on the label. The same rule applies to wine brand names that capitalize on any geographical region of viticultural significance. So, for example, a wine brand called Napa Creek should have 75 percent Napa fruit, while any wine with “Napa Valley” printed anywhere on the label must have 85 percent Napa Valley fruit, since Napa Valley is an official AVA. There’s a loophole in the federal law, however: Labels that existed before 1986 are protected by a grandfather clause. Franzia’s labels qualified for this exemption.
Napa Valley Vintners feverishly lobbied state legislators to close the loophole. In 2000, California enacted SB25241, which protects Napa County and its county place names with a requirement that any wine that refers to Sonoma regions on its label—in any manner—to use at least 85 percent regional grapes. Sonoma County’s protectant SB1380, which took effect in January 2007, requires 75 percent regional grapes. The laws offer additional protection to local vintners and thwart the efforts of Franzia and others. A representative for Franzia’s Bronco Wine Company declined to comment for this story.
Because state and federal laws only protect wine sold within the United States, vintners are now taking steps to pursue international protection. Napa Valley was recently awarded Geographic Indication (GI) status by the European Union, which means the EU will regulate imported bottles marked as Napa Valley wines, and ban those that aren’t truly from the region. This is especially notable because it’s the first case in which the EU has granted GI status to any American product.
“This represents a significant win in the continuing fight to protect the Napa name around the world,” says Peter McCrea, president of the NVV board of directors. “Our vintners and growers have worked hard for more than 100 years to make Napa Valley a winegrowing region second to none in the world, and when misleading labels on bottles overseas lead a consumer to believe a wine is from Napa when it’s not, it’s deceptive and undermines the reputation for quality associated with our region.”
Evidently not satisfied with AVA and GI designation, Napa Valley (along with six other regional groups from around the world) also initiated the Joint Declaration to Protect Wine Place and Origin. To date, 13 wine regions have joined the declaration. This collaborative declaration states, “Wine, more than any other beverage, is valued based on its association to its place of origin—and with good reason. The names of these places are familiar, and synonymous with quality.” The declaration further affirms, “The geographic place names of wine regions are the sole birthright of the grapes that are grown there, and when these names appear on wines that do not contain fruit from that region, they lose their integrity and their relevance, becoming merely words.”
While the purpose of this declaration is vague, it does reveal a unified mission—and possibly foreshadows future legal attempts to protect the original signatory regions: Napa Valley, Champagne (France), Jerez (Spain), Port (Portugal), Washington state, Walla Walla Valley (of Washington state), and Oregon; as well as six new groups who joined the coalition in March: Chianti Classico (Italy), Tokaj (Hungary), Victoria and Western Australia (Australia), Paso Robles and, not to be left out, Sonoma County.
Sonoma County Vintners is a nonprofit organization committed to promoting and protecting the Sonoma winegrowing region. Honore Comfort, executive director of the organization, says the petition “raises the awareness of Sonoma County as one of the world’s premier and distinct winegrowing regions and recognizes the uniqueness and quality of Sonoma County wine.”
The name game
One would think all North Bay vintners to be of like mind, but some local vintners find themselves on the other side of the debate, advocating the use of foreign appellations on the labels of wines produced locally.
Take the case of bubbly. True Champagne, according to the French, must satisfy two conditions: it must be produced according to the age-old méthode champenoise and it must be made in the Champagne region of France. Anything else should be called “sparkling wine.”
How, then, do local “Champagne”-producing wineries such as Gallo and Korbel get away with using the Champagne name? Both wineries label their bubbly as “California Champagne,” although Gallo’s website, interestingly, calls it sparkling wine in accordance with the near-universal acceptance of the Champagne region’s turf claim.
While France’s claim isn’t backed by any United States laws, it does enjoy legal protection in many other countries, and the recently signed Joint Declaration may be the first step in bringing protection to the Champagne name here. While any enforced legal protection might disappoint wineries like Gallo (whose sparkling wine is a big seller but only a drop in the huge barrel of the company’s overall wine sales) it could severely impact local champagneries such as Korbel.
For Korbel Champagne Cellars, legislation blocking use of the Champagne name would be a major blow to the brand. Korbel president and owner Gary Heck passionately defends the right to use the name. “Because Korbel Champagne labels bear the appellation of origin in direct conjunction with the word ‘Champagne’ as prescribed by regulation and have done so since 1937, consumers know Korbel Champagne is made in the United States,” says Heck. “For more than a century, Korbel has produced premium méthode champenoise Champagne, a fact proudly stated on its label…to highlight this adherence to the traditional, time-honored production methods originated in—but not unique to—the Champagne region of France. That’s why we call it Champagne.”
Pointing to regulations established by the U.S. Department of Treasury in the 1930s as well as the 1997 IRS tax code, Heck explains that Champagne, sherry and port are considered “semi-generics,” meaning they can be printed on labels as long as the growing region is identified and the wines are made according to the established standards of production. “It would take an act of Congress to change this regulation,” he asserts.
Heck certainly makes a good point. Of course the sacred place names of Napa and Sonoma should be regulated and protected from piracy. But on the other hand, we don’t wish any ill consequences of place name protection on Korbel or any other local winery that may suffer as a result of new legislation.
Take, for example, the debate currently fermenting over the establishment of a new Calistoga AVA, a motion supported by nearly all Calistoga wineries and grape growers, Napa Valley Vintners, the city of Calistoga and the Napa County Board of Supervisors, among others. But two local wineries, Calistoga Cellars and Calistoga Estate, don’t meet the 85 percent rule, since most of their grapes are grown outside of Calistoga. Under a new AVA designation, they would be required to change their names, which would result in a crippling blow to their established brands—possibly even put them out of business. Supporters of the Calistoga AVA designation say it’s imperative that Calistoga have its own AVA—and that would require, by law, that all wineries using the Calistoga name make wine using Calistoga grapes.
Terry Hall, Communications Director for NVV, explains, “Currently we’re working to help get the Calistoga AVA recognized. It’s amazing that one of the most historic and distinctive place names in Napa Valley is having trouble being recognized. There are a couple of brands that, in recent years, have been using ‘Calistoga’ in their brand names. One of them makes its wines in Ukiah [in Mendocino County] without Calistoga fruit. This undermines the entire legitimacy of the AVA process and really lets the consumer down.”
Calistoga Estate didn’t reply to interview requests for this story; however, Calistoga Cellars claims to use 100 percent Napa Valley grapes for its wines and, in fact, one of its prized Cabernet vineyards is located just a few miles away from Calistoga, in neighboring St. Helena. The winery has been in business since 1998, and its brand is well established throughout the country.
Roger Louer, managing general partner of Calistoga Cellars, clarifies the winery’s point of view: “Some people say we’re against a local AVA, but that’s not true,” he says. Louer goes on to explain that, if the AVA could be called “Calistoga District” instead of simply “Calistoga,” the winery could continue to operate under its existing label; therefore the winery is petitioning for that legal distinction. But most proponents of the Calistoga appellation don’t want to add “District” to the name, despite the fact that several Napa Valley subappellations are so-named (Stags Leap District, Oakville District, Spring Mountain District and Diamond Mountain District).
Critics say a Calistoga District AVA would create a loophole for Calistoga Cellars, allowing it to use grapes from anywhere in the state, despite the brand name’s implication that it comes from Calistoga. This is indeed a possibility, but only if the winery changes the growing region cited on the label from Napa Valley to the less-specific California. Still, Louer claims, the winery has no intention of abandoning its current practice of identifying the Napa Valley region on its label and using all Napa Valley fruit. He simply doesn’t know if it’s feasible to meet the 85 percent Calistoga fruit requirement.
“We’ve spent well over $1 million promoting our label throughout the country, and if we lose this thing, we’ll have to develop a new brand and start all over,” says Louer. “The brand is selling really well, and it’s helping promote the town of Calistoga.” The fate of the Calistoga (or Calistoga District) AVA now lies in the hands of the federal government. “When people understand [our perspective], they support us,” Louer concludes. Only time will tell if Calistoga Cellars can count the feds as friends.
Future developments
For those carrying the sword of justice, there seems to be little rest. Pointing out that California is the only state that currently offers adequate additional protection to bolster federal laws, Napa Valley Vintners employs a search firm to monitor all trademark applications to “keep brands from trading on our good name.” And while McCrea acknowledges receiving GI status from the EU was “a great victory,” the group isn’t stopping there: advocacy work continues in China, India, Vietnam and other nations. Linda Reiff, executive director of NVV, puts it simply: “If it says Napa on the label, it better be Napa fruit in the bottle.”
Ms. Comfort of the Sonoma County Vintners adds, “What exists now is a patchwork of state laws that protect only a few regions [Sonoma County being one of them], along with federal regulations that protect against ‘misleading’ brand names. Uniform legislation that equally protects all AVAs and appellations would be a positive move for consumers and the wine industry.”
So marketplace surveillance will continue, and new lawsuits and legislation will undoubtedly arise. Indeed, because law is a product of civilized society and wine is civilized society’s preferred libation, it was inevitable that the two would eventually cross paths. And yet, amid the labyrinth of legislation and across the schisms of controversy, one sentiment rings loud: Place is paramount. So next time you reach for a Napa Cabernet or Sonoma Pinot Noir, check the label closely to make sure it’s not made in Fresno.
