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NVV right, TTB wrong on proposed new rules

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Like many people, I’ve been following the brouhaha up in Napa Valley concerning the use of the word “Calistoga” on two wines (Calistoga Cellars and Chateau Calistoga) whose grapes don’t come from that area, and that are not made there. This sort of deceptive practice has been going on forever (remember the flap a few years ago over Fred Franzia’s “Napa Ridge” brand?). Now, the Napa Valley Vintners (NVV) is in full battle mode, charging the Treasury Dept.’s Alcohol and Tobacco Tax and Trade Bureau (TTB) with a “cover up” and hoping to bring enough political pressure on them so that they’ll change their position on the key issues.

They even got Sen. Dianne Feinstein’s chief of staff to meet with the TTB’s administrator. That’s hard ball.

NVV’s beef is with two rules TTB proposed last year. Notice # 77 proposed the establishment, long-awaited, of a Calistoga American Viticultural Area (AVA). Notice # 78 proposed certain revisions in the way AVAs are determined. The NVV opposes both proposed rules, arguing that, if they pass into law later this summer, they will impact, not just Calistoga and Napa Valley, but “all other American wine regions,” in the words of Terry Hall, the NVV’s communications director.

The problem with # 77, says NVV, isn’t the establishment of a Calistoga AVA. It’s that the rule proposes to “grandfather protection for certain [existing] brand names,” including Calistoga Cellars and Chateau Calistoga. In the TTB’s words, the owners of Calistoga Cellars “demonstrated a legitimate interest in not losing the ability to continue to use its long-held Calistoga Cellars brand,” and TTB sympathizes with them. NVV says this opens the door to unscrupulous producers “to sell…wine with a misleading label, trading on the quality reputation” of famous winegrowing regions with which they have no connection.

The problem with # 78, according to NVV, is that it proposes to eliminate the practice of “nesting” AVAs within larger AVAs (the way, say, Stags Leap District is “nested” within Napa Valley). TTB argues that “a comprehensive review of the AVA program is warranted in order to maintain the integrity of the program.” In key words, TTB argues that “because the establishment of an AVA can limit the use of existing brand names [e.g. Calistoga Cellars -- italics mine], approval of an AVA can have a deleterious effect on established businesses…”. In my reading of # 78, TTB does not actually ban the creation of nested AVAs, but would make the approval process much harder. The TTB’s key wording, it seems to me — words that trouble NVV — are these: “In any case in which an AVA would be created entirely within another AVA…the petition must dispel any apparent inconsistency or explain why it is acceptable.” [Italics mine] This seems to put an unduly harsh burden on the petitioner. In the case of Calistoga, it makes the petitioners of a Calistoga AVA responsible for proving that their case is stronger than the case of Calistoga Cellars, whose economic fears the TTB, in # 77, is on record as commiserating with.

It wouldn’t be the end of the world if both # 77 and # 78 become law as written. I also think the whole AVA thing can get a little silly; anyone can buy their own AVA, if they have enough money to hire lawyers and petitioners. Still, I’m with NVV on this one. TTB, for unknown reasons, is trying to change the rules in the middle of the game. They shouldn’t.

  1. “This seems to put an unduly harsh burden on the petitioner. In the case of Calistoga, it makes the petitioners of a Calistoga AVA responsible for proving that their case is stronger than the case of Calistoga Cellars, whose economic fears the TTB, in # 77, is on record as commiserating with.”

    You are absolutely correct. It does put a harsh burden on the petitioner that seeks an AVA inside an AVA. They are pushed into the corner of arguing that the larger AVA really isn’t unique.

    It seems to me that for a nested AVA to really be legitimate, you’d have to consent to disconnecting the new smaller AVA from the larger one, and not allow the use of the larger AVA on the label that carries the new, smaller AVA. I’m guessing that’s not going to happen.

  2. Tom, it’s almost a philosophical debate — how many angels can dance on the head of a pin. Like I’ve always said, an AVA in itself is largely meaningless. You can have a bad wine from a “good” AVA and vice versa. The ultimate AVA is the bottle of wine.

  3. Unless I am missing something, I see this as a Pandora’s box, in multiple ways. Should Edna Valley Vineyards be allowed to make any California appellation wine? Should Dry Creek Vineyard be allowed to keep making Clarksburg Chenin under the DCV label? THe AVA may well be noted, but doesn’t the Dry Creek imply place and create confusion?

    I wonder if the NNVers have simply sharpened their teeth too much since taking a chunk of Franzia flesh in court.

    And I see Tom’s points about the nesting AVAs being even more problematic than the Calistoga situation. It’s going to sap a lot more time, energy and attention than it is really worth in the end, I think, mainly because appellations in general in the U.S. have mostly failed to reach levels of distinction compared with those in Europe. That is not a knock, just a dollop of reality.

  4. “THe AVA may well be noted, but doesn’t the Dry Creek imply place and create confusion?”

    I’ve always thought that placement of the AVA on the bottle should be enough in terms of relating where the grapes come from, no matter what the brand name is. Either you commit to the concept of using an AVA as the designation that tells the person where the wine came from or you don’t. If not enough folks know that this designation is there to tell them where the grapes were grown and they might be confused if an existing place name is used in the brand name, then what we have is a failure to communicate. Maybe more money needs to be spent educating consumers what an AVA is and why there is a place or region noted on the front label of a wine.

  5. If the NVVA is really in geographic purity down to the sub-appellation level, they could have drafted the Bronco-Truth In Labeling Law to force those vintners who had a sub-appellation name in their brand or winery name to use only grapes from the sub-appellation. But, no, those members still get to use Stags Leap, Rutherford, Yountville, Atlas Peak if they make their wines with Napa Valley grapes and had a pre-1986 label approval. Sounds like a double standard to me.

    Thanks Tom for your comments. The AVA within AVA is real issue – but NVVA wants what it wants and so we hear the outcry – not reason.

  6. Steve, I am still genuinely confused as to why you think the two Calistoga brands are doing anything wrong in wanting to keep doing what they have been doing for a dacade. How is their situation any different from Rutherford Hill, which gains significant benefit from its place-oriented name, yet makes only wines under the Napa Valley AVA?

  7. I think in general wineries shouldn’t use geographic names when they’re not sourcing grapes or wine from that appellation. Granted, we’ll never achieve absolute purity in this regard, and ultimately it may be the right thing to do to let the 2 brands keep their names. You’ll notice I said it wouldn’t be the end of the world if both Notices passed into law. But lines ought to be drawn where they can be. I also refer back to the issue of Notice #78, which seems to be putting business and fiscal matters ahead of terroir, when it comes to new nested AVAs. Suppose that an authentically new region was identified within Carneros — a region that, under any objective consideration, deserved its own AVA. Suppose then that to give this new region AVA status conflicted with the business objectives of an existing winery. Would it be better to deny the new region AVA status just so the winery could benefit? I don’t think so.

  8. This issue has to do with how European les Napkins want to be. Is it brand America or not?
    If Napa wants to be Burgundy, then it does the grand cru, the premier cru, the village, the region. If it is Bordeaux, it is ONLY grapes grown on the chateau property (for better or for worse). If it is Super Tuscan, it is winner take all.
    All new world appellations need to address this and decide. And note that Argentina is going very, very slowly into the appellation world. Why? A lot of the French etc. like the flexibility.
    And, of course, what about the grapes. If you go French/etc, should Calistoga only be able to plant Cabernet Sauvignon, Sangiovese, Touriga Nacional?
    As to grandfather, NVVA is much more aware in recent years thanks to the Europeans and to the US Eu treaties on wine, but the EU didn’t exactly win that place/brand battle. After all, Champagne, Sherry etc were grandfathered in for such wines made before only 2 years ago. And if the brand sells, so does the grandfather.
    Then, of course, the current economy comes into brand play.
    Whatever TTB does with Napa will reverberate around the New World.

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