A Napa a Day Keeps the Lawyers in Play [Now With 100% Real Cheese]
March 23, 2005
The saga of Fred Franzia's Bronco Wine Company -- the fourth largest U.S. wine company, perhaps best known as the producer of the so-called "Two Buck Chuck" wines under the Charles Shaw label, the history of which I previously took up here -- continues. The U.S. Supreme Court has now denied Franzia/Bronco's petition to consider/overturn the California Supreme Court's ruling (discussed here) that Franzia/Bronco cannot market wines with brand names incorporating the word "Napa" and related place names unless those wines are actually made with a significant percentage of grapes that grew in those places.
- The Shaw brand name contains no geographical references, so it is unaffected by this litigation. It has been targeted in a separate suit, based on the reference to "Napa" as the place at which the Shaw wine is "cellared and bottled," as mentioned here.
The U.S. Supreme Court's order -- on page 9 of this order list [pdf] -- consists of a content-free denial of certiorari [review], leaving the California court's decision unchanged. For a little more substance you can read the Los Angeles Times report here or, via Professor Bainbridge's wine weblog, the Reuters version. The hedonistic Professor B also reports the story on his main weblog, declaring the outcome "a big win for consumers, banning an increasingly common form of misleading advertising."
It has been suggested in certain quarters (scroll down, but don't forget to stop and smell the haiku) that there is an inconsistency between the Professor's anti-regulatory position on wild mushrooms and his enthusiasm for enforcement of California's "At-Least-75%-From-Napa-if-the-Brand-Name-on-the-Label-Says-'Napa'" rule, but I don't see it: while the mushroom regulations (foolishly, in the view of this Fool) cut off the supply of a delicious and non-threatening foodstuff altogether, the labeling rule simply requires that another delicious foodstuff be accurately described by its packaging.
The labeling of wines can be, like The Naming of Cats, a difficult matter. It is a problem that provides fodder for Many Lawyers, as you can learn if you read on in the lengthy continuation of this post, which encompasses soil, climate, distilled water, the French, the Chileans, many lawyers, Sideways, and of course the aforementioned cheese.
[Lengthy continuation begins here:]
One of the features that makes wine a beverage unlike most others is this: that the best and most desirable wines are expressions of the place where the grapes from which they are made were grown. The essential flavors manifested in a particular grape variety will vary depending on the particular patch of ground into which that particular vine sank its roots.
- Robert Lawrence Balzer, sometimes attributing the observation to the late August Sebastiani, has often said (as he did just yesterday):
The vine as a pump does not bring up distilled water from the ground.
Features of the soil such as mineral content, depth of the water table and the like, and features of climate such as rainfall, quantity and direction of sunlight, ranges of temperature over the course of a typical day or typical season, all contribute to making the wine from a particular place potentially unique. In some wine regions -- Burgundy being the classic example -- the differences in character of a particular grape variety can vary enormously on the two sides of the same footpath. Over large distances -- say, between Bordeaux and New Zealand, or between the Napa Valley in northern California and the Temecula region south of Los Angeles -- the inherent differences only become more pronounced.
There are, of course, plenty of ways in which wine can be manipulated or blended to produce a more "consistent" or "generic" quality, and some particular places are less distinctive than others, but for purposes of this discussion we will take it as a given that place matters in winemaking, and that as a result certain places with established reputations have established value and desirability. Pertinent example: the Napa Valley, the good reputation of which is such that the inclusion of "Napa" on a label in itself reflects well on, and potentially increases the value of, the beverage within. For many potential consumers, the one thing they know about wine is that "Napa=good," and the presence of those four little letters N-A-P-A may be the deciding factor in choosing to purchase one bottle over another.
Bronco Wine Company acquired ownership of several preexisting brand names that include the word "Napa" or the names of places known to be within the Napa Valley ("Rutherford," for example). While the wines sold under those brands previously had been made with grapes from the Napa Valley, once they were acquired by Bronco those brand names were used on wines that contained few or no actual Napa Valley grapes. The California regulations, upheld in the litigation reported above, aim to avoid confusion or deception of consumers by requiring actual Napa content in wines labeled with Napa-centric names. And yes, the regulations not incidentally benefit and are strongly supported by established wineries in the Napa Valley because they maintain the cachet of the regional name.
The United States may be protective of its own geographical names, but we are notoriously fast and loose with established names from "Old Europe." We blithely label sparkling wines as "champagne" when the proper noun Champagne refers to a specific region in France. The French themselves cannot call their bubbly "Champagne" unless that is the place it was grown and made. The same phenomenon is on display in domestic "burgundy" and "chablis". The real Chablis is a single town within the escargot-fancying region of Burgundy.
Federal authority over wine labeling and wine-naming resides in the Bureau of Alcohol Tobacco & Firearms [aka "Booze, Butts & Bullets"], which has declared terms such as "champagne" and "burgundy" to be "semi-generic." Here are some relevant excerpts of BATF labeling rule 4.24 [available in its entirety here]:
(b)(1) A name of geographic significance, which is also the designation of a class or type of wine, shall be deemed to have become semi-generic only if so found by the appropriate ATF officer. Semi-generic designations may be used to designate wines of an origin other than that indicated by such name only if there appears in direct conjunction therewith an appropriate appellation of origin disclosing the true place of origin of the wine, and if the wine so designated conforms to the standard of identity, if any, for such wine contained in the regulations in this part . . . .
(2) Examples of semi-generic names which are also type designations for grape wines are Angelica, Burgundy, Claret, Chablis, Champagne, Chianti, Malaga, Marsala, Madeira, Moselle, Port, Rhine Wine (syn. Hock), Sauterne, Haut Sauterne, Sherry, Tokay.
(c)(1) A name of geographic significance, which has not been found by the appropriate ATF officer to be generic or semi-generic may be used only to designate wines of the origin indicated by such name. . . .
(2) Examples of nongeneric names which are not distinctive designations of specific grape wines are: American, California, Lake Erie, Napa Valley, New York State, French, Spanish. . . .
(3) Examples of nongeneric names which are also distinctive designations of specific grape wines are: Bordeaux Blanc, Bordeaux Rouge, Graves, Medoc, Saint-Julien, Chateau Yquem, Chateau Margaux, Chateau Lafite, Pommard, Chambertin, Montrachet, Rhone, Liebfraumilch, Rudesheimer, Forster, Deidesheimer, Schloss Johannisberger, Lagrima, and Lacryma Christi. . . .
"Semi-generic" means only semi-protected: so far as BATF is concerned, if it sparkles you can call it "champagne" and if it is white you can call it "chablis." The French, of course, would beg to differ.
- Did you know that there is an international organization for wine lawyers? The International Wine Law Association -- or, to give it its more chic-sounding official name, Association Internationale des Juristes du Droit de la Vigne et du Vin, AIDV -- will hold a conference in Paris this month on international wine labeling issues.
- If you have seen the film Sideways, you have seen the portion of Santa Barbara County that is officially designated as the Santa Rita Hills under BATF's American Viticultural Areas, or AVA, program. It's a lovely name for a lovely part of the state, but it poses one small problem, described last September in the Los Angeles Daily Journal [article available only at a price, to subscribers, in the archives]:
Santa Barbara County winegrowers wanted to create a new appellation and give it the historic name of their corner of the Santa Ynez Valley - Santa Rita Hills.
The trouble was, a Chilean winery had been selling its wines in California for more than 10 years under its own Santa Rita trademark. The Chilean mark would lose much of its value if the Santa Barbara growers began using the same name on their labels.
The dispute illustrates a problem that has confounded wine lawyers for decades: How do you protect the integrity of an appellation of origin while preserving the rights of trademark holders?
'On one hand you have brands, intellectual property assets, that are owned and exploited by business,' said David Stoll, an intellectual property lawyer at Farella Braun & Martel. 'On the other, you have communities and governments using geographical indications.'
(Link added.) California's wine trade organization, the Wine Institute, provides a number of resources relating to controversy involving AVAs. This page in particular takes up the "place names vs. brand names" problem.
Quelque du Fromage, m'sieu?: These issues are not restricted to the world of wine. Professor Bainbridge's skeptical interrogator asks:
And, is Parma, Italy, right to be irked over American-made 'parmesan' cheese?
The WTO would say to our parmesan paisan "yes, it is," as evidenced by this report from New Zealand:
The World Trade Organisation has upheld the European Union's right to protect food names, such as roquefort cheese, even though its rules discriminate against products from outside Europe.
The complex legal verdict has serious implications in export sectors where 'New World' manufacturers rely heavily on product names derived from Old World place names.
Because cheese names were 'exported' with European migration around the world, the overwhelming majority of names of cheeses which are widely traded internationally are European.
New Zealand earns $1 billion a year from cheese exports and Fonterra has previously warned that in an extreme scenario, half of that revenue could be disrupted if the EU restricted the use of traditional cheese names - such as feta, brie, parmesan, camembert, gouda, edam, emmental and even the humble cheddar - only to cheeses produced in the relevant region.
Per this Australian report, the issue will be up for discussion in the upcoming Doha Round of international trade talks. The trade reps can chat about it over "brie" and "chablis."
Excellent post, George. Willamette Valley wineries may have to consider the same labeling problems as Napa at some point. Well, I don't expect film production companies are headed this way, but our economy would benefit: howzabout "Sideways II - Would You Like Crab With That?"
Posted by: bridget | March 23, 2005 at 04:36 PM
George, I was hoping you're enter this discussion, but you've generated a whirlwind in a wine glass -- and a windy one, at that.
It seems, like insurance lawyers say, that it depends on just whose cherries are being picked. Telling mushroom buyers where their wild mushrooms come from is only a matter of degree from this NAPA (it still means auto parts to me) regulation. I can't get past the fact that consumers have both the low price AND the information on the label (specifically stating the geographic source of the wine) to help them avoid confusion over Bronco's product.
I have a feeling that European libertarians are embarrassed by the cheesey parmesan decision that you've cited. The natives of Parma -- the cheese-makers of Parma, to be more precise -- and the wine-growers of NAPA have proven the power of their guilds. Meanwhile, common sense is being treated like the common mushroom.
Posted by: David Giacalone | March 23, 2005 at 08:10 PM
I doubt very many buyers of 2-buck-chuck will stop buying it because it doesn't say NAPA on the label. The NAPA growers have made their legal point but they have not accomplished what they really want - the elimination of a lower cost producer undercutting their market.
Posted by: sam | March 28, 2005 at 03:02 PM
Sam: I think you are right that the "Napa" issue doesn't enter into the decisionmaking process for 2-Buck Chuck buyers. Those buyers may purchase the $2BC wines once out of curiousity, but if they buy again it will likely be because of the tempting balance between price (very low) and quality (not extraordinary, but definitely not low). I've said before that I think that the Napa Valley winemakers' arguments in the litigation specifically targeting the $2BC wines -- in which the True Napans are objecting to the fact that the word "Napa" appears on the back label to identify (accurately) the name of the city where the wines are finished and bottled -- are not nearly so strong as the "Napa Brand Name" claims that the Supreme Courts have been involved in.
Fred Franzia is a clever fellow, not likely to be slowed down too much by this ruling. I predict he will find a way to comply with the regulations when it comes to sourcing the grapes for the Napa-branded wines and still manage to price them at an attractively low level (though not so low as $2BC), just to spite his hifalutin' Napa Valley nemeses.
Posted by: George Wallace | March 28, 2005 at 03:24 PM