Wines & Vines

March 2018 Vineyard Equipment & Technology Issue

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30 WINES&VINES March 2018 Viewpoint W ine is the prototypical example of a prod- uct of place. Regulatory efforts aimed at protecting against the misuse of wine appellations, therefore, are essential to the industry, providing safeguards for con- sumers and producers alike. In the February 2018 issue, Wines & Vines published an article entitled "Should Out-of-State AVA Use be Legal?" The article refers to the federal rulemaking that is presently pending to eliminate a labeling loophole that currently allows certain wines to avoid federal labeling laws, including laws governing the use of wine appella- tion names. In keeping with its decades-long commitment to protect consumers from deceptive practices and to safeguard geographic place names for wine, the Napa Valley Vintners (NVV) strongly endorses TTB's proposed rule. Federal labeling laws and regulations require that any wine sold in interstate commerce that is labeled with an AVA be derived 85% or more from grapes grown within the boundaries of that AVA, and be fully finished within the state in which the AVA is lo- cated. The producing winery must keep strict sourcing and production records to back up its AVA labeling claim. These federal labeling re- quirements provide the consumer with reliable information about wine origin, including where grapes in the wine are sourced and where the wine is produced. However, a winery that sources grapes from another state can avoid these federal wine-origin labeling regulations entirely (as well as other laws that govern use of vintage date and grape variety) by agreeing to sell the resulting wine only in the win- ery's home state and applying for what is known as a Certifi- cate of Exemption from Label Approval, often referred to as a "COLA exemption." On Sept. 10, 2015, 51 members of Congress signed a letter alerting TTB that some wines sold in intra- state commerce under a COLA exemption are using AVA designations without meeting the federal AVA requirements. In response, TTB has proposed in Notice 160 that all wines – both those sold in intrastate and interstate commerce – abide by the same labeling rules. This makes perfect sense. Consumers have a right to know that all wines meet the same standards with respect to such important label designations as appellation of origin, vintage date and grape variety. By law, a 2015 Napa Valley Cabernet Sau- vignon sold in interstate commerce is required to be made from at least 85% grapes grown within the boundaries of the Napa Valley AVA, at least 95% of grapes from the 2015 vintage and at least 75% Cabernet Sauvignon, and be fully finished in California. As it stands today, however, a winery that sells its wines only in the state where it was produced and uses a COLA exemption can put information on its label that doesn't comply with the appellation, vintage or variety require- ments or the place of production requirement that applies to every wine sold in interstate commerce. Many states, most notably California and Or- egon, have strict state laws governing wine com- position and labeling that apply to all wines made there. If an AVA wine is made from grapes that are transported out of the state in which the AVA is located, the out-of-state producing winery does not need to comply with the same rules as the in-state winery. When a wine is exempt from the fed- eral AVA requirements, it leaves consum- ers and producers in a quandary. They can't be sure what the AVA means on that wine, and they most likely don't know that the wine doesn't meet the same requirements that apply to other AVA wines sold in interstate commerce. Producers are no longer playing on a level field. This is why TTB proposed in Notice 160 to make COLA-exempt wines subject to the same appel- lation of origin labeling require- ments as COLA wines. As stated in its Notice, TTB "proposes to amend n RICHARD MENDELSON Why the AVA Labeling Loophole Should Be Closed

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