Should Out-of-State AVA Use Be Legal?

TTB considers public comments regarding hotly debated issue

by Jane Firstenfeld
wine vineyard harvest grapes AVA use
Many Napa Valley grapegrowers disapprove of wineries in other states using the Napa Valley appellation on their labels. Photo: Napa Valley Vintners

Washington, D.C.—When the TTB published proposed regulation 160B, which would close a loophole that allows wineries to use AVA names on wines made using grapes from other states, the bureau was inundated with comments on both sides of the issue. The official comment period closed Jan. 9, but controversy remains.

Wine Institute, Napa Valley Vintners and the Oregon Winegrowers Association supported the change, but other commenters argued forcefully against it.

“I’ve not seen any fact-based argument on how the current labeling loophole undermines the system,” said John Aguirre, president of the California Association of Winegrowers (CAWG). “What’s the evidence? By what measure?”

The “loophole” refers to COLA label approvals. Wine made with out-of-state grapes may be marketed and labeled with AVAs, but only if the product is sold within the winery’s home state.

The association leader understands that AVAs selling high-value grapes would like to close the loophole, but he insists more information is needed before a ruling is finalized. During discussions with CAWG’s board of directors, growers considered where the grapes are grown to be most significant.

“We think this issue is very important. There are core principles in play,” he said. Even with modern refrigerated trucks, it’s possible grapes might lose quality on a cross-country journey. “Growers are highly motivated to retain quality for the long haul.”

Michael Kaiser, vice president of WineAmerica, said the nationwide winery association remains neutral on the issue. It’s polarizing in the industry, he acknowledged, and mostly a marketing question.

A Georgia-based WineAmerica member who imports Napa Valley grapes and used the in-state-only sales exemption on its labels was caught selling its “Napa Valley” wines online, which prompted officials in California to request the 160B rule change in 2016. 

Kaiser predicted, “We’ll probably see something in the spring” from TTB.

A fifth-generation farmer in Lodi, Calif., whose family has been growing grapes since 1965, strongly opposes the change. Although his ranch did not sell any grapes out of state in 2017, Bruce Fry, vice president of Mohr-Fry Ranches, is a proud beneficiary of Lodi’s strenuous marketing efforts. He claims out-of-state sales can be a lucrative marketing alternative for grapegrowers.

Fry went through a California Farm Bureau leadership program that included a field trip to the Midwest. At a Missouri winery, he was happy to see an array of Lodi wines for sale. Out-of-state sales provide an alternate market and promotion venue for his Lodi (California) AVA, Fry said. Napa and Sonoma grapegrowers could initiate local ordinances to limit out-of-region sales, Fry suggested. “This affects everybody.”

Legal consultant Robert Tobiassen, former chief counsel for the TTB, explained: “One of TTB’s conditions is that for using an AVA, the wines must have been finished in that AVA.…What TTB is trying to do with 160B is sort out what the current COLA regulations are and trying to help consumers to ensure that its standards and criteria are met.”

The bureau always looks for consensus, he acknowledged, but with regulations dating back to 1935, the case is not simple. There’s a continuing struggle to balance interests of consumers without violating First Amendment free-speech rights.

TTB is always open to negotiation, he said. The bureau can convene a negotiating group, an idea favored by Aguirre. Nothing prohibits such a meeting, and the record of one would be on file with the TTB. Although the official comment period for 160B is now closed, it’s still not too late to submit a late comment, according to Tobiassen.


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