BILL ANALYSIS Ó
AB 394
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
394 (Mark Stone and Alejo)
As Amended June 15, 2015
Majority vote
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|ASSEMBLY: |78-0 |(April 23, |SENATE: |39-0 |(July 09, 2015) |
| | |2015) | | | |
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Original Committee Reference: G.O.
SUMMARY: Requires any wine bottled on or after January 1, 2019,
and labeled with an American Viticultural Area (AVA) that is
located entirely within the County of Monterey to bear the
designation "Monterey County" on the label. Specifically, this
bill:
1)Requires any wine bottled on or after January 1, 2019, and
labeled with an AVA that is located entirely within the County
of Monterey to bear the designation "Monterey County" on the
label in a type size as specified.
2)Stipulates that the requirement in 1) above, shall not apply
to any wine labeled with a viticultural area appellation of
origin established pursuant to specified federal regulations
when the name of the appellation is "Monterey."
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3)Authorizes Alcoholic Beverage Control (ABC) to suspend or
revoke the license of any person who violates the provisions
of this bill.
The Senate amendments:
1)Authorize the Department of ABC to suspend or revoke the
license of any person who violates the provisions of this
bill.
2)Make technical change.
3)Add co-authors.
EXISTING LAW:
1)Establishes ABC and grants it exclusive authority to regulate
the licensing, enforcement, and administration of the
alcoholic beverage control laws.
2)Requires any wine bottled on or after January 1, 2014, and
labeled with an AVA located entirely within a County of the
19th class (Sonoma County) to bear the designation "Sonoma
County" on the label, as specified.
3)Requires that, when the word "Napa" (or any federally
recognized viticultural region within Napa County) appears on
a brand label, at least 75% of the grapes used to make that
wine must be from Napa County.
4)Requires wines produced within the "Napa Valley" to be labeled
as being derived from that valley, if the wine label indicates
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that they are produced within a separate viticultural area
within the Napa Valley, in order to preserve consumer
identification and understanding.
5)Prohibits the sale of wine produced, bottled, or labeled after
December 31, 2008, in this state that identifies, in a brand
name or otherwise, on any label, packaging material, or
advertising, the name "Sonoma," unless at least 75% of the
grapes used to make the wine are from Sonoma County, as
specified.
6)Requires all wines produced within the current Paso Robles
appellation to be labeled with the designation "Paso Robles."
7)Requires all wines produced within the current Lodi
appellation to be labeled with the designation "Lodi."
8)Stipulates that every person who, with intent to defraud,
either falsely makes, alters, forges, or counterfeits the
label for any wine or uses the label or bottle of any wine
belonging to another, without his or her consent, is guilty of
a misdemeanor.
AS PASSED BY THE ASSEMBLY, this bill, on or after January 1,
2019, requires any wine bottled and labeled with an AVA,
established pursuant to federal law, which is located entirely
within Monterey County to include the designation "Monterey
County" on the label, unless the federal AVA is "Monterey."
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: This bill, as amended in the Senate is consistent
with Assembly actions.
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Background: 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 Alcohol and Tobacco Tax and Trade Bureau (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 (e.g., "California") and counties identified with the
word "county" (e.g., "Napa County," "Monterey County," "Sonoma
County," "Eldorado County," etc.) as well as all designated
American "viticultural areas." An AVA is a grape growing region
distinguishable by geographical area features, as recognized by
the TTB pursuant to specified criteria and procedures.
These criteria and procedures, and a complete list of AVAs, are
set forth in Code of Federal Regulations Title 27, Part 9. In
brief, 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 2014, there were more than 220
recognized AVAs nationwide - 135 of which are located in
California. The 135 California viticultural areas recognized by
the TTB include, among others, Alexander Valley, Anderson
Valley, Chalk Hill, Clarksburg, Fair Play, Hames Valley, Lodi,
Los Carneros, Monterey, Napa Valley, Paso Robles, Rockpile,
Russian River Valley, Santa Lucia Highlands, Sonoma Valley,
Spring Mountain, Stags Leap, and Wild Horse Valley.
The regulations specify the conditions for use of each type of
appellation of origin. A wine qualifies for a state or county
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appellation of origin if at least 75% of the volume derives from
grapes grown in the area indicated by the appellation of origin.
Thus, under TTB regulations the appellation of origin
"California" signifies that at least 75% of the wine in the
bottle was made from grapes grown anywhere in the state of
California. Similarly, the appellation of origin "Napa County"
or "Sonoma County" or "Mendocino County" signifies that at least
75% of the wine in the bottle was made from grapes grown
anywhere in that particular County. To qualify for an
appellation of origin consisting of an AVA, at least 85% of the
wine must derive from grapes grown in the indicated area. The
regulations do not require disclosure of the place of origin of
the remaining portion of the wine.
Purpose of this bill: This bill establishes a "conjunctive
labeling" provision in the ABC Act for wines made from grapes
grown within recognized winegrowing areas, or American
Viticultural Areas, in Monterey County. This provision mirrors
existing labeling provisions for Sonoma, Napa, Lodi, and Paso
Robles.
According to the author's office, California is a global leader
in viticulture and wine grape cultivation, and its many
wine-producing regions are known specifically by their local
appellation due to their high quality products and labeling
requirements. Monterey County wine producers, which are leaders
in the California wine industry, provide a variety of jobs in
the wine growing and supply chain, and contribute immensely to
the County's economy. Monterey County is unique among wine
regions because it rates very high in value, quality and
awareness.
The author's office contends this bill will insure that
consumers recognize every bottle of wine produced from Monterey
County grapes. In addition, this bill will build brand equity
for Monterey County wines and preserve and strengthen the
county's position as a recognized world-class wine region while
increasing sales of wines produced from the region's grapes.
Consistent inclusion of Monterey County on wine labels will
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strengthen the county's brand over time while strengthening the
diversity of AVAs within the county and the quality wines each
produces.
This bill provides a three-year phase-in period to enable
wineries to redesign their labels and get regulatory approval to
use the new labels.
In support: In support of this measure, the Family Winemakers
of California states "the Monterey appellation is one of the
fastest growing premium vineyard and winery regions in
California, as well as one of the state's tourism jewels. Wines
produced from Monterey are becoming nationally and
internationally recognized for their distinctive qualities. As
the Monterey wine region continues its growth and development,
it is important that smaller, separate sub-appellations benefit
from and contribute to the linkage that comes with conjunctive
labeling. AB 394 is designed to accommodate the desired
specificity of sub-appellation labeling, but link it to the
broader Monterey AVA."
There is no opposition on file.
Analysis Prepared by:
Eric Johnson / G.O. / (916) 319-2531 FN:
0001194