BILL ANALYSIS
AB 1798
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1798 (Evans)
As Amended August 18, 2010
Majority vote
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|ASSEMBLY: | |(May 13, 2010) |SENATE: |33-0 |(August 5, 2010) |
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(vote not relevant)
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|COMMITTEE VOTE: |18-0 |(August 26, 2010) |RECOMMENDATION: |concur |
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Original Committee Reference: G.O.
SUMMARY : Establishes a "conjunctive labeling" provision in the
Alcoholic Beverage Control Act (Act) for all wines made from grapes
grown within recognized winegrowing areas, or American Viticultural
Areas, in Sonoma County. This provision mirrors existing
conjunctive labeling provisions for Napa, Lodi and Paso Robles.
Specifically, this bill :
1)Requires, beginning on or after January 1, 2014, that any wine
labeled with an AVA located entirely within a County of the 19th
class (Sonoma County) must display the designation "Sonoma
County" on the label, as specified.
2)Makes it explicit that this provision shall not apply to any wine
labeled with a viticultural area appellation of origin when the
name of the appellation includes the term "Sonoma County."
The Senate amendments :
1)Deletes provision which would have retained the requirement that
the winegrower, or the officer, director, or agent of the
winegrower meet the specified conditions regarding the sale or
furnishing of wine under the circumstances described above, but
would eliminate the requirement that statements describing these
conditions be made pursuant to an undertaking approved by ABC.
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2)Deletes a provision which would have increased from 60 to 75
days, the length of time that the Alcoholic Beverage Control
Appeals Board has to enter an order after an appeal is filed.
3)Requires, beginning on or after January 1, 2014, that any wine
labeled with an AVA located entirely within a County of the 19th
class (Sonoma County) must display the designation "Sonoma
County" on the label, as specified.
4)Makes it explicit that this provision shall not apply to any wine
labeled with a viticultural area appellation of origin when the
name of the appellation includes the term "Sonoma County."
5)Provides that the ABC may suspend or revoke the license of any
person who violates this requirement.
EXISTING LAW :
1)Existing provisions of the Act, known as "tied-house"
restrictions, generally prohibit a winegrower from having an
ownership interest in an on-sale alcoholic beverage license, with
limited exceptions. Among other exemptions, existing law exempts
from the tied-house restrictions any licensed winegrower who
meets specified conditions, including that the winegrower, or his
or her officer, director, or agent, enters into an undertaking,
approved by the Department of Alcoholic Beverage Control, that
makes specified statements regarding the sale or furnishing of
wine by the winegrower, or any officer, director, or agent of the
winegrower.
2)Requires that, when the word "Napa" (or any federally recognized
viticultural region within Napa County) appears on a brand label,
at least 75 percent of the grapes used to make that wine must be
from Napa County.
3)Requires wines produced within the "Napa Valley" to be labeled as
being derived from that valley, if the wine label indicates that
they are produced within a separate viticultural area within the
Napa Valley, in order to preserve consumer identification and
understanding.
4)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,
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the name "Sonoma," unless at least 75 percent of the grapes used
to make the wine are from Sonoma County, as specified.
5)Requires all wines produced or bottled within the current Paso
Robles appellation to be labeled with the designation "Paso
Robles."
6)Requires all wines produced or bottled within the current Lodi
appellation to be labeled with the designation "Lodi."
7)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.
FISCAL EFFECT : Unknown.
COMMENTS :
Purpose of this bill: This bill establishes a "conjunctive
labeling" provision in the Alcoholic Beverage Control Act for all
wines made from grapes grown within recognized winegrowing areas,
or American Viticultural Areas, in Sonoma County. This provision
mirrors existing conjunctive labeling provisions for Napa, Lodi and
Paso Robles.
According to the author's office, the Sonoma County Vintners along
with the Sonoma County Winegrape Commission (representing over 170
wineries and 1,800 growers combined) recently reached consensus on
a framework to standardize regional wine product labeling (the wine
industry term is conjunctive labeling) for all wines made from
grapes grown within recognized AVAs in Sonoma County. There are 13
AVAs located in Sonoma County (e.g., Dry Creek Valley, Russian
River Valley, and Sonoma Valley). The purpose of conjunctive
labeling is to build an association of quality in an increasingly
competitive global wine market for the delivery of Sonoma County
wines. The proposed language provides a three-year phase-in period
to enable wineries to redesign their labels and get regulatory
approval to use the new labels.
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
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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 American Viticultural Area (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 Part 9 of Title 27 of the Code of Federal Regulations. 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 2007, there were 190 recognized AVAs
nationwide - 107 of which are located in California. The 107
California viticultural areas recognized by the TTB include, among
others, Alexander Valley, Anderson Valley, Chalk Hill, Clarksburg,
Fair Play, Howell Mountain, Lodi, Los Carneros, 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
appellation of origin if at least 75 percent 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 percent 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
percent 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 percent of the wine
must derive from grapes grown in the indicated area. Thus, the
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appellation of origin "Napa Valley" signifies that at least 85
percent of the wine in the bottle was made from grapes
grown anywhere in Napa Valley. The regulations do not require
disclosure of the place of origin of the remaining portion of the
wine.
Federal regulations require the wine label to bear a "brand name."
The regulations provide that, in general, "a brand name of
viticultural significance may not be used unless the wine meets the
appellation of origin requirements for the geographic area named."
This prohibition is subject to an exception. If a brand
name was in use before July 7, 1986, it is considered
grandfathered. Grandfathered brand names of viticultural
significance may be used for wines that do not meet the appellation
of origin requirements for the geographic area named, provided the
wine is labeled with a true appellation of origin consisting of a
county or viticultural area (if the brand name refers to a
geographic area smaller than a state) or a state or lesser
appellation (if the brand name refers to a state).
Federal regulations require that the name and address of the
"bottling winery" appear on the wine label, accompanied, in certain
circumstances, by a phrase such as "bottled by." There is no
requirement that the bottling winery is located in the geographic
area where the wine was made or the grapes were grown.
Federal law also provides that wine may not be sold or shipped in
interstate commerce unless it bears a label that TTB has previously
approved. A certificate of label approval ("COLA") is obtained by
submitting an application to the TTB. The application must include
an exact replica of the label as well as other information
regarding the wine covered by the label.
Prior legislation : AB 87 (Blakeslee), Chapter 674, Statutes of
2007, requires all wines produced or bottled from any
sub-appellation located within the current Paso Robles appellation
to carry the designation Paso Robles" on the label.
SB 1380 (Chesbro) Chapter 879, Statutes of 2006, prohibits the sale
of wine, produced, bottled, or labeled after December 31, 2008,
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.
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SB 1293 (Chesbro), Chapter 831, Statutes of 2000, prohibits the use
of the word "Napa" on a brand label unless at least 75% of the
grapes used to make that wine came from Napa County. One of the
stated purposes of this law was to minimize consumer confusion
because consumers assume brand names of wines suggest the origin of
the grapes. The law essentially prohibited Bronco from marketing
the three labels referenced above using non-Napa grapes. Bronco
challenged the law in court arguing that state law could not
preempt federal law, which also provides a 75% requirement, but
exempts brands established before July 7, 1986. Bronco also argued
that its labels were not deceptive since the origin of the grapes
was spelled out, although in smaller print. Bronco also challenged
the law on other claims including free speech rights, but the
California Court of Appeals rejected those arguments.
Analysis Prepared by: Eric Johnson / G. O. / (916) 319-2531
FN: 0006784