Do you drink U.S.-made wine? Then this story is for you

McClatchy NewspapersJanuary 20, 2011 

WASHINGTON — California winemakers have successfully pruned some labeling regulations they feared could hurt business, following a long behind-the-scenes lobbying campaign.

After being pressed by everyone from the Paso Robles mayor to California's congressional delegation, Treasury Department officials Thursday updated the rules for designating viticultural areas. They stopped short of what officials once proposed.

"The changes provide clearer regulatory standards for the establishment of (viticultural areas) and clarify the rules," Treasury Department regulators stated.

The new rules govern winemakers who want federal approval for regional names they can put on labels, such as the existing Santa Maria Valley, Sierra Foothills and Lodi viticultural areas. There are currently some 198 recognized winegrowing regions, most in California.

The rule changes aren't nearly as dramatic as originally proposed three years ago, and that appears to please a wine industry that once opposed the proposed rule changes.

"We're fine with it," Wine Institute spokeswoman Nancy Light said Thursday. "We're pleased with the final rule."

Through its Alcohol and Tobacco Tax and Trade Bureau, the Treasury Department oversees wine labeling. Grape-growing regions with distinctive climatic, soil and other characteristics can secure viticultural area designation, following an application process that often takes several years.

Officials in November 2007 proposed revising the viticultural area rules.

"The regulations for the establishment of (viticultural areas) are over 20 years old," Treasury Department officials noted, adding that the "program has not operated as well" as some winemakers claim.

The wine industry, though, originally appeared united in opposition.

The then-mayor of Paso Robles, Frank Mecham, charged in 2008 after the viticultural area rules were first proposed that they would "undermine decades of work on the part of the wine industry." The California Legislature passed a resolution opposing the new rules. Wine Institute President Robert Koch denounced what he termed "radical changes," while 61 House members weighed in against the proposals.

"(They) would have substantial, complicated and irreparable consequences for the future of America's growing wine industry," then-Rep. George Radanovich, R-Mariposa, and the other House members declared.

Democratic Sen. Dianne Feinstein added at the time that "the entire wine industry" opposed rule changes. Feinstein's strongly worded opposition, in turn, was one part of the concerted campaign brought by California winemakers and their political allies.

Over time, regulators backed down from some of the proposals.

Notably, regulators dropped a "grandfathering clause" proposal that would have allowed existing wineries to keep using geographic names on labels even if they are not part of the viticultural area; the example cited often by opponents involved Calistoga. Light of the Wine Institute cited this shift as being particularly important.

In the new rules, officials also declined to impose a specific minimum acreage size or vineyard density for new viticultural areas, though they caution that the grape-growing will have to be "sufficient." Some existing areas are small. The River Junction area in San Joaquin County, for instance, is 1,300 acres; by contrast, the Sierra Foothills area spans 2.6 million acres.

Officials are still emphasizing their authority to deny applications and to demand more specific information from applicants. They stopped short, though, of pursuing a controversial idea that might have explicitly constrained small viticultural areas embedded within larger viticultural areas.

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