Wiggins Measure Opposing Proposed Federal A.V.A. Rule Changes Approved by Asm. Committee
California Political Desk
March 03, 2008
Sacramento – The Assembly Committee on Governmental Organization has approved Senate Joint Resolution (SJR) 22, a measure by Senator Patricia Wiggins (D – Santa Rosa) opposing two rule changes proposed by the United States Department of Treasury´s Tax and Trade Bureau (TTB). Friday's 11-0 vote means that SJR 22 will soon be taken up by the full Assembly, perhaps as early as March 3.
SJR 22 asks the TTB to withdraw Notice of Proposed Rulemaking No. 77, relating to establishing a "Calistoga" American Viticultural Area (AVA), and Notice of Proposed Rulemaking No. 78, relating to altering regulations concerning the establishment of AVAs. Wiggins says the propose changes pose a threat to the state and national wine industry´s ability to fairly trade domestically and internationally.
"I introduced SJR 22 to send a message to the TTB that the California Legislature opposes the bureau´s recent proposals to revise American Viticultural Area regulations," Wiggins said. She represents several of the state´s premium wine growing regions (Lake, Mendocino, Napa and Sonoma) and chairs the Senate Select Committee on California´s Wine Industry.
The Federal Alcohol Administration Act establishes broad federal regulatory authority over the interstate trade in alcohol beverage products. The Secretary of the Treasury, through the TTB, administers an extensive code of regulations governing, among other things, the contents of wine labels, including brand names, the name and address of the bottling winery, and indications of the wine´s origin, as well as the use of such information in advertising.
Under federal regulations, an "appellation of origin" is a geographic designation referring to the place where the grapes used to make a specified percentage of the wine were grown. For American wines, an appellation of origin includes the names of states and counties as well as all designated American "viticultural areas."
TTB may recognize an AVA area if it is locally or nationally known for grape-growing, has particular and definable boundaries, and has geographic features distinguishing it as a grape-growing area. As of April 2007, there were 187 recognized AVAs nationwide – 107 of which were located in California.
On March 31, 2005, the TTB published a notice of proposed rulemaking to establish the "Calistoga" American Viticultural Area (AVA) in Napa County, California. Two entities, "Calistoga Cellars" and "Calistoga Estate," expressed opposition to the establishment of the proposed Calistoga AVA, and said they would be forced to change their labels because they do not source 85% of their grapes within the proposed Calistoga AVA.
In response, the TTB issued a new notice of proposed rulemaking (No. 77) to seek comments on its proposal to provide "grandfather" protection for certain brand names used on existing certificates of label approval (COLA), provided those labels also carry information that would dispel an impression that the wine meets the requirements for using the AVA name. Notice No. 77 contains language specifying that TTB amend its regulations so that if a brand has been in "commercial use for a significant period of time" it does not have to source 85% of its grapes from Calistoga to keep its original label. TTB is proposing that March 31, 2005 be the grandfather cutoff date.
Numerous vintners, grape growers, and winery associations throughout California have expressed opposition to the TTB´s Notice No. 77 and emphasize that the regulations being proposed by the TTB "flagrantly disregard the rights of consumers to know what they are buying." These entities also point out that over the past seven years the wine industry has supported California´s "Napa" labeling law, the "Sonoma" labeling law, and the "Paso Robles" conjunctive labeling law, all of which ensured consumers were not being misled by brand names.
"TTB´s proposed Rulemaking #77 will create a Calistoga AVA, while arbitrarily allowing one winery to avoid the AVA requirements and mislead consumers regarding where their grapes are from," Wiggins said. "This proposal undermines the entire foundation of the AVA process and allows one special interest to gain advantage over other wineries in the AVA including those who have built the reputation of the area over decades."
The issue with the proposed Calistoga AVA prompted the TTB to propose a major revamping of rules for establishing AVAs (proposed Rulemaking #78). The TTB says it is concerned with "nested" appellations – such as forming a Calistoga appellation within Napa Valley – and wants to change the regulations on establishing AVAs within AVAs. The TTB stopped approval of all AVAs this past summer in order to review and presumably improve the approval process.
The California wine industry believes that the existing AVA petition process is fundamentally sound. The Napa Valley Vintners (NVV) contend that "this issue is not solely Napa Valley´s problem as it will affect all other American wine regions by opening the door for less forthright producers to mislabel wines, thereby diluting public confidence in our domestic products." Additionally, the NVV says that Notice No. 78 "is in conflict with the U.S. supported World Trade Organization´s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which protects geographic identity in wine labeling."
Wiggins agrees. "The TTB´s second proposal takes a bad idea and expands it," she said. "Proposed rulemaking #78 will, on a going forward basis, allow certain wine labels to avoid the requirements for using an ava name by implementing a "rolling grandfather clause," Wiggins added. "Further, the proposal endangers the concept of sub-appellations that have been a critical part of distinguishing California´s various wine-producing areas."
SJR 22 asks the TTB to withdraw Notice of Proposed Rulemaking No. 77, relating to establishing a "Calistoga" American Viticultural Area (AVA), and Notice of Proposed Rulemaking No. 78, relating to altering regulations concerning the establishment of AVAs. Wiggins says the propose changes pose a threat to the state and national wine industry´s ability to fairly trade domestically and internationally.
"I introduced SJR 22 to send a message to the TTB that the California Legislature opposes the bureau´s recent proposals to revise American Viticultural Area regulations," Wiggins said. She represents several of the state´s premium wine growing regions (Lake, Mendocino, Napa and Sonoma) and chairs the Senate Select Committee on California´s Wine Industry.
The Federal Alcohol Administration Act establishes broad federal regulatory authority over the interstate trade in alcohol beverage products. The Secretary of the Treasury, through the TTB, administers an extensive code of regulations governing, among other things, the contents of wine labels, including brand names, the name and address of the bottling winery, and indications of the wine´s origin, as well as the use of such information in advertising.
Under federal regulations, an "appellation of origin" is a geographic designation referring to the place where the grapes used to make a specified percentage of the wine were grown. For American wines, an appellation of origin includes the names of states and counties as well as all designated American "viticultural areas."
TTB may recognize an AVA area if it is locally or nationally known for grape-growing, has particular and definable boundaries, and has geographic features distinguishing it as a grape-growing area. As of April 2007, there were 187 recognized AVAs nationwide – 107 of which were located in California.
On March 31, 2005, the TTB published a notice of proposed rulemaking to establish the "Calistoga" American Viticultural Area (AVA) in Napa County, California. Two entities, "Calistoga Cellars" and "Calistoga Estate," expressed opposition to the establishment of the proposed Calistoga AVA, and said they would be forced to change their labels because they do not source 85% of their grapes within the proposed Calistoga AVA.
In response, the TTB issued a new notice of proposed rulemaking (No. 77) to seek comments on its proposal to provide "grandfather" protection for certain brand names used on existing certificates of label approval (COLA), provided those labels also carry information that would dispel an impression that the wine meets the requirements for using the AVA name. Notice No. 77 contains language specifying that TTB amend its regulations so that if a brand has been in "commercial use for a significant period of time" it does not have to source 85% of its grapes from Calistoga to keep its original label. TTB is proposing that March 31, 2005 be the grandfather cutoff date.
Numerous vintners, grape growers, and winery associations throughout California have expressed opposition to the TTB´s Notice No. 77 and emphasize that the regulations being proposed by the TTB "flagrantly disregard the rights of consumers to know what they are buying." These entities also point out that over the past seven years the wine industry has supported California´s "Napa" labeling law, the "Sonoma" labeling law, and the "Paso Robles" conjunctive labeling law, all of which ensured consumers were not being misled by brand names.
"TTB´s proposed Rulemaking #77 will create a Calistoga AVA, while arbitrarily allowing one winery to avoid the AVA requirements and mislead consumers regarding where their grapes are from," Wiggins said. "This proposal undermines the entire foundation of the AVA process and allows one special interest to gain advantage over other wineries in the AVA including those who have built the reputation of the area over decades."
The issue with the proposed Calistoga AVA prompted the TTB to propose a major revamping of rules for establishing AVAs (proposed Rulemaking #78). The TTB says it is concerned with "nested" appellations – such as forming a Calistoga appellation within Napa Valley – and wants to change the regulations on establishing AVAs within AVAs. The TTB stopped approval of all AVAs this past summer in order to review and presumably improve the approval process.
The California wine industry believes that the existing AVA petition process is fundamentally sound. The Napa Valley Vintners (NVV) contend that "this issue is not solely Napa Valley´s problem as it will affect all other American wine regions by opening the door for less forthright producers to mislabel wines, thereby diluting public confidence in our domestic products." Additionally, the NVV says that Notice No. 78 "is in conflict with the U.S. supported World Trade Organization´s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which protects geographic identity in wine labeling."
Wiggins agrees. "The TTB´s second proposal takes a bad idea and expands it," she said. "Proposed rulemaking #78 will, on a going forward basis, allow certain wine labels to avoid the requirements for using an ava name by implementing a "rolling grandfather clause," Wiggins added. "Further, the proposal endangers the concept of sub-appellations that have been a critical part of distinguishing California´s various wine-producing areas."
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