Loosening AVA Regulations

Who benefits if wines can be 'finished' in adjacent states?

by Jane Firstenfeld
The formation of the new Rocks District, which gets its name from distinctive basalt cobblestones that litter the soil in the area, led to a debate on labeling wines that are made in a state that's different than where the grapes are sourced.

Washington, D.C.—An unusual proposal from the Tax & Trade Bureau (TTB) would allow wines to be labeled with the grapes’ AVA of origin, if “fully finished” in an adjacent state. TTB notice 147 was, the bureau stated, “in response to comments TTB received during the comment period for notice No. 142, Proposed Establishment of The Rocks District of Milton-Freewater District Viticultural Area, which is located near the Oregon-Washington state line in northeastern Oregon.”

The proposal has engendered some confusion among wine industry organizations nationwide, although none has yet contributed to the dialogue on the bureau’s website. Michael Kaiser, director of public affairs at WineAmerica, sent his summary of the proposal to Wines & Vines.

“The TTB is proposing that wineries in adjacent states be allowed to use the single-state AVA from the bordering state. To use the “Finger Lakes” as an example, a Pennsylvania winery would be able to purchase grapes from the Finger Lakes AVA and use the Finger Lakes AVA on the label, if the wine is fully finished in Pennsylvania. The regulations currently state that a Pennsylvania winery can purchase Finger Lakes grapes and use a “New York” state appellation of origin.

“The current rules for AVA use on domestic wine label are:

1. The labeled area is an American viticultural area approved under U.S. regulations

2. Not less than 85% of the volume of the wine is derived from grapes grown in the labeled viticultural area

3. The wine is fully finished (except for cellar treatment and/or blending which does not alter the class and type of the wine) in the state or one of the states where the viticultural area is located

“To use the example of Finger Lakes AVA again, (this) is currently allowed on a wine label if 85% of the grapes are grown in the Finger Lakes and if it is a New York winery. However, the winery does not need to be located within the AVA, it simply needs to be within the state where the AVA is located.

“Currently, in the case of a multi-state appellation, like the Columbia Valley, the winery producing the wine must be located within one of the states located in the AVA. An Oregon winery located in the Columbia Valley can use grapes from a Washington vineyard in the Columbia Valley and use the Columbia Valley AVA on the label. The new proposed rulemaking does not change this.”

In a conversation with Wines & Vines, Kaiser clarified further: “The TTB is proposing that wineries in adjacent states be allowed to use the single-state AVA from the bordering state.” WineAmerica has yet to take an official stance regarding the proposal, but the board of directors will address it next week, Kaiser said.

The TTB’s expressed goal of establishing AVAs is, it says, “to prohibit consumer deception and the use of misleading statements on labels and ensure that labels provide the consumer with adequate information as to the identity and quality of the product.”

Given the proliferation of AVAs and sub-AVAs in recent years, avoiding confusion seems a worthy aim. Kaiser said however, that if approved, Notice 147 “might allow more accuracy, (regarding grape sources) but dilute the impact of an AVA.”

Voices heard across the continent
Steven Bates, executive director of The Long Island Wine Council in New York, suggested the proposal “could work for multi-state AVAs.” Grape growers in his area, who mostly sell within New York or in adjacent Connecticut, might benefit.

“Most of our wineries are licensed as farm wineries,” he said. The grapes they vinify must come from within the state. “We are working with growers and winemakers so that the AVA means something. It is something proprietary,” Bates said. Like many organizations including Napa Valley Vintners, the council is a member of the international Protect Place Coalition, demanding respect of its required name and geographic position.

The Napa Name Protection committee of Napa Valley Vintners reviewed the proposal, and unanimously recommended that NVV oppose it. A board meeting later this week will weigh the issue, according to government relations director Rex Stults.

“Certainly for us it would jeopardize long standing California laws, including conjunctive labeling, and other protections of the Napa name,” he said. “To me, 147 seems to be a solution in search of a problem.”

Wendell Lee, VP and general counsel at the California Wine Institute, commented, “When we first saw the proposal we started to look at its impact, and became concerned. I think the TTB’s trying to respond to the Milton-Freewater issue. But to us in California, it totally ignores existing state regulations. California has several regulations that serve as safeguards, and we don’t want them short-circuited.” California law, he said, requires wine to be finished within California if labeled with a California AVA name.

At a recent meeting, the WI board took a position opposing the change, and Lee said, may propose a solution that would trigger existing California provisions. “AVAs are different from state appellations,” he noted.

Who benefits?
Most of the first 14 comments to TTB supported the proposal; most of these appear to be Milton-Freewater stakeholders. Others were more equivocal.

William Howard wrote: “Milton-Freewater’s new AVA-The Rocks District—must be exclusive in order to protect the economic survival of the City of Milton-Freewater and our growth as a producer of fine wines. I therefore am NOT in favor of the relaxation of the TTB regulations to allow fruit produced “On the Rocks” to be processed outside the state of Oregon.

From Lodi, Calif., Jon Bjork, co-owner of Pantheon Cellars, wrote:
“As a member of the wine industry, in my mind—and I think in the minds of most wine consumers—an AVA’s primary purpose is to give an indication of the growing conditions for the winegrapes….I have never considered an AVA to indicate where that wine was produced or bottled….Frankly, I had no idea this regulation limiting production to the state where grown was in place until a client in a far-away state had a COLA (label approval) rejected for its reference to our local AVA.

“I support the proposed rule. I also suggest it be extended to any state, not only those adjacent to the AVA where the winegrapes are grown.”

Tim Kennedy, whose address was not published, submitted: “While I agree in principle with the proposal, I think the proposed rules too broad…Allowing all California, Idaho and Washington wineries to use “The Rocks District of Milton-Freewater” on their labels….will cause many unforeseen issues. It is a major change for the TTB to consider.”

Will the TTB send its proposal back to the drawing board, as it does many AVA proposals? You be the judge: Is it too broad, too restrictive or just right? Public comments will be accepted here until April 10.

Posted on 03.19.2015 - 09:33:00 PST
I should be able to live in MA, buy Napa, CA grapes, truck them across the country. Make wine from my Rutherford AVA grapes and label them as such as that is where the grapes/wine came from. How does a processing facility change the origin of the grapes.

Posted on 03.20.2015 - 04:05:10 PST
When I see 'Napa Valley'on a wine label, it doesn't only suggest the flavors I can expect from Napa Valley varietals. It also tells me they had enough money to be in Napa Valley:Probably took great care to harvest and sort the grapes, and get them to a crush pad as fast as possible. Could afford new French Oak barrels, temperature controlled storage, and periodical laboratory testing for quality. Lastly, it also tells me the wine was bottled properly, and will cellar safely on my shelf for the life of the wine. AVA labels are much more than the origin of the grapes, and proposal #147 threatens the entire AVA system.