AVA upset

The American wine industry is headed for a hair-pulling, eye-gouging, bloody brawl -- that's the view of industry insiders who have read the Alcohol and Tobacco Tax and Trade Bureau (TTB), Department of the Treasury, proposed regulatory changes (Notice No. 78) concerning AVAs, or American viticultural areas, issued last week. Federal regulators have proposed rewriting the fundamental framework for identifying American wines, the AVAs, to expand the number of allowable brand names that are also the names of AVAs. These brand names would not be required to adhere to the AVA rules that wines contain a minimum of 85% grapes grown in that AVA. So, for instance, wines from Calistoga Cellars would not have to use any grapes from a Calistoga AVA.

"It's a huge change," says Terry Hall, spokesman for the Napa Valley Vintners Assn. "This reverses the regulatory direction that the industry has taken for the last several decades." The Wine Institute, the foremost trade association for the industry, is meeting this week to begin formulating a response to the proposal, a meeting that many expect will be the opening round in an industrywide brawl.

The proposal reopens a deep fissure in the American wine industry. Big companies like Constellation Brands, E&J Gallo and Bronco Winery traditionally have pushed for commercial interests (brand names) to take precedence over place names (AVAs). High-end wineries and regional associations like the Napa Valley Vintners Assn. have lined up on the other side of the issue to fight for the sanctity of place names.

You don't have to be a wine geek to care about AVAs. While the American system of geographic indicators doesn't stipulate wine quality, consumers can form opinions about particular regions by the quality of the wines produced there. Muddying the difference between AVAs and brand names would leave consumers little choice other than to judge wines by brand name alone. And, in that world, the marketing juggernauts -- those big wine companies that can afford huge advertising campaigns -- would be the winners.

In 1986, when the existing AVA rules were established, the two factions were at each other's throats until the advocates of place names finally backed down. Existing brand names were allowed to continue being used without adhering to the new AVA rules. This new federal proposal to allow more brand names that are also AVA names, industry insiders say, reignites that old battle. Only now the stakes are higher, Hall says. The American wine industry will lose hard-won credibility in the international wine world if it allows the meaning of American place names to be confused with brand names. At the same time, there is far more money at stake for companies with successful brand names.

The federal action is an outgrowth of a controversy that erupted when Calistoga Cellars objected to the establishment of a Calistoga AVA. Rather than resolving the dispute with that one brand name owner, federal regulators decided to rethink the AVA rules in general.

-- Corie Brown

Comments

[Corie Brown]

Anytime you create consumer confusion, which these proposed rules do in spades, you have jeopardized quality. This is the most controversial development in the American wine industry in years. It's a confusing subject -- federal rules and regulations always are -- so the enormity of the change is just starting to dawn on the wine world.--Corie Brown

[Bryce]

So, if it passes, it will open the door for wine writers to educate the public on the "lesser-known" AVAs. Do you think wine quality is in jeopardy in this debate?

[Corie Brown]

If these new regulations become law, the labeling requirements will change. But not because of the proposals I wrote about in my initial blog but because there are other rule changes being proposed by the TTB beyond what that blog item. These changes concern AVAs within AVAs. Right now, if you are using fruit from Oakville AVA to make your wine, for instance, you can say you are Oakville AVA or Napa Valley AVA. The AVAs are layered on top of each other. This new proposal would separate the sub AVAs from the larger AVAs. Think of cookie dough with the cookies cut out. The leftover dough is all that can be considered the larger AVA. It's a proposal that will send consumers screaming from wine stores in confusion.

[Bryce]

Sounds like a case of false advertising if this thing passes. Corporate American flexing its muscles. Will labeling standards change on the bottles? How will consumers know they are buying wine from a certain region? Sales reps at stores will have to go through more training.