by Lindsey A. Zahn on September 29, 2010
In a prior entry, On Reserve recognized that The Postal Operations Sustainment and Transformation (POST) Act of 2010, if passed, could allow for the shipping of wine or beer through the federal Postal Service system. (See New Postal Reform Bill Could Affect Shipping Wine.) The text of the bill most applicable to the wine industry reads as follows:
(2) REGULATIONS.—Section 3001 of title 39, United States Code, is amended by adding at the end the following subsection:
‘‘(p)(1) Wine or malt beverages shall be considered mailable if mailed by a licensed winery or brewery, in accordance with applicable regulations under paragraph (2).
‘‘(2) The Postal Service shall prescribe such regulations as may be necessary to carry out this subsection, including regulations providing that—
‘‘(A) the mailing shall be by a means established by the Postal Service to ensure direct delivery to the addressee or a duly authorized agent at a postal facility;
‘‘(B) the addressee (and any duly authorized agent) shall be an individual at least 21 years of 10 age, and shall present a valid, government-issued photo identification at the time of delivery;
‘‘(C) the wine or malt beverages may not be for resale or other commercial purpose; and
‘‘(D) the winery or brewery involved shall
‘‘(i) certify in writing to the satisfaction of the Postal Service that the mailing is not in violation of any provision of this subsection or regulation prescribed under this subsection; and
‘‘(ii) provide any other information or affirmation that the Postal Service may require, including with respect to the prepayment of State alcohol beverage taxes.
‘‘(3) For purposes of this subsection, a winery or brewery shall be considered to be licensed if it holds an appropriate basic permit issued under the Federal Alcohol Administration Act.’’.
POST Act of 2010, § 3
The full text of the bill can be accessed at The Postal Operations Sustainment and Transformation (POST) Act of 2010.
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by Lindsey A. Zahn on September 28, 2010
Jeff Carroll, V.P. of Compliance of ShipComplaint, posted a blog update today on the ShipComplaint blog with respect to H.R. 5034. The post, H.R. 5034 Update: Revision Reignites Debates, Important Hearing Set for Wednesday, recognizes and highlights the revisions to the original H.R. 5034 bill, reinstates the House Judiciary Committee hearing that will take place at 11:00 ET this Wednesday, September 29th, and gives an overview of the bill’s present congressional support. It is a highly recommended read, especially in preparation for the viewing of tomorrow’s Committee hearing.
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by Lindsey A. Zahn on September 27, 2010
This Wednesday, September 29, 2010 at 11:00 AM EST, a live hearing of H.R. 5034 will be conducted. The hearing can be watched via webcast at the Committee on the Judiciary.
An additional resource that houses much information on the bill, as well as provides latest developments and FAQs, is STOP H.R. 5034.
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by Lindsey A. Zahn on September 24, 2010
On September 23, 2010, Senator Thomas Carper introduced a new bill to the Senate. The new bill, titled the The Postal Operations Sustainment and Transformation (POST) Act of 2010, serves to reduce the number of home delivery days, close extraneous post offices, and open retail outlets or automated kiosks in grocery stores and other retails stores that would be less expensive to run. The bill creates additional, immediate financial relief for the Postal Service, but with respect to the material traditionally published by On Reserve, will not be discussed in this article. (For further information, please read Postal Service Reform Bill Set for Release.) The new POST Act does serve a more pertinent role in the wine industry: if enacted under its current edition, it would allow for shipping of wine and beer through the USPS system. Currently, wine and beer has been shipped through private shipping services, including FedEx and UPS.
This bill is especially interesting in light of both the Supreme Court’s holding in Granholm v. Heald, as well as subsequent federal court decisions that deal with wine shipment issues, and in light of the aim of H.R. 5034. Whereas the POST Act aims to increase the flow of revenue and allows the federal Postal Service system to provide additional services by offering options like shipping wine and beer, one might wonder how this Act would assist the Postal Service if H.R. 5034 is simultaneously enacted. If both bills are to become law, wineries in states that disallow direct shipment would not be allowed to directly ship wine to customers through any means, including the Postal Service system. For supporters of the POST Act who seek to increase the flow of revenue throughout the federal Postal Service system, opposing H.R. 5034—a bill that seeks to, essentially, limit the shipping of wine and beer through means such as the Postal Service—would be within the best interest of the Postal Service.
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by Lindsey A. Zahn on September 20, 2010
The topic of this article was prompted by the suggestion of Joy Alessandra Kull ’09, a colleague of mine from the Cornell University School of Hotel Administration who is professionally involved with the wine industry.
Historical Context of Early Alcoholic Beverage Regulation
One of the most captivating aspects of wine law that I have discovered in my study as a student thus far is its continual, modern-day links to its unique history. It is difficult, if not impractical, to gain a comprehensive understanding of wine and the law in America without examining the historical perspective of alcoholic beverage regulation. Many may point to the ratification of the 18th Amendment of the United States Constitution in 1919 or the repeal of same through the 21st Amendment in 1933 as the exploratory provision of alcoholic beverage regulation. And to some extent, the time period of Prohibition and the repeal of same, is quite certainly a pinpoint of American attitudes and social viewpoints toward alcoholic beverage regulation. However, these sentiments and concerns did not emerge with the birth of Prohibition, as American attitudes had long before been favorable of furthering temperance (and curtailing intemperance) through regulations, restrictions, and penalties.
The earliest wine laws in America were created by European colonists, specifically Puritan settlers, who brought with them an attitude of abstinence from alcohol consumption, believing intemperance promoted impropriety and lethargy and was sinful. Many early laws published public drunkenness, as well as excessive consumption in private institutions, such as colonial inns. Alcohol regulations were initially mostly localized, but as demographics and social attitudes changed, and as immigrants from countries such as Ireland and Germany sought new lives in America, many directives became statewide prohibitions on alcohol consumption as a way to more broadly control social stability.
The Birth of the Blue Laws
With the increasing desire to regulate alcoholic beverage consumption and preserve social morals, many states enacted Blue Laws. The Blue Laws received their name because to be “blue” was to be “puritanical.” (Some also say the Blue Laws were originally written on blue paper, although insufficient evidence confirms such.) The laws were designed to enforce religious observance and standards, explicitly to preserve Sunday as a day of religious worship and rest. Many of the laws restricted shopping on Sundays and required closure of stores and establishments that sold and/or served alcoholic beverages during certain hours on Sundays. The rationale behind such legislative action was that individuals should spend Sundays in church and not consume (or, at least, not purchase) alcoholic beverages. The most notable state to have enacted such laws (and to still enforce some aspects of such laws) was the state of Connecticut (although several others still do mandate liquor and alcoholic beverage stores to be closed on Sundays). Other aspects of the Blue Laws, not entailing the sale of alcohol, have since been repealed or declared unconstitutional.
States that still enact various parts of alcoholic beverage restriction provisions of the Blue Laws include Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, and Wisconsin. Because these laws are enacted by the legislature of each state, the specific language of the laws varies conditional to each state. However, the essential purpose is still the same: to trump sales of alcoholic beverages during certain hours on Sundays.
The state of Connecticut remains one of the strictest, if not the strictest, state with respect to sale of alcoholic beverages on Sundays. Presently, liquor sales are illegal on Sundays in the state of Connecticut and stores selling alcoholic beverages cannot remain open later than 9:00 PM on other days of the week. Additionally, restaurants and bars cannot sell alcoholic beverages or liquor after 1:00 AM on Sundays through Thursdays and can only remain open until 2:00 AM on Fridays and Saturdays. Connecticut remains the only state in the Northeast that prohibits store sales of alcoholic beverages on Sundays.
A Constitutional Nexus
In recent decades, many have challenged the constitutionality of the Blue Laws for restricting commercial activity on Sundays. The landmark Supreme Court case, McGowan v. Maryland, 366 U.S. 420 (1961), with respect to a challenge of Maryland’s Blue Laws held that such laws were not unconstitutional and did not violate the Free Exercise Clause nor the Establishment Clause of the United States Constitution’s First Amendment. In its reasoning, the Court noted that while the origin of Blue Laws was to promote traditional Christian values and church attendance, the contemporary laws of Maryland allowed for a “uniform day of rest” for all constituents through the promotion of social values and well-being, irrespective of religion.
Currently, residents of Connecticut are in favor of ending the Blue Laws that prohibit the sale of alcoholic beverages on Sundays. Individuals argue that enforcing such “antiquated” laws results in lost revenue for alcoholic beverage stores and is less convenient for consumers. Additionally, some state that alcoholic beverage stores in Connecticut that border on other states lose business to stores in neighboring states that are permitted to sell alcoholic beverages to consumers on Sundays. Finally, supporters of repealing the Connecticut Blue Laws postulate that, “according to a December 2009 report issued by the General Assembly’s Legislative Program Review and Investigations Committee, the state could see an increase of up to $8 million in new revenue if the Sunday alcohol sales prohibition were repealed.” (See End CT Blue Laws.) Regardless of what is in store for the Blue Laws of Connecticut or any other state within the United States, it cannot be argued that Puritan values and the effects thereof no longer linger within the states.
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by Lindsey A. Zahn on September 17, 2010
H.R. 5034, the Comprehensive Alcohol Regulatory Effectiveness (“CARE”) Act, has recently undergone a change in its text. The new text of the bill reads as follows:
“State or territorial regulations may not intentionally or facially discriminate against out-of-state or out-of-territory producers of alcoholic beverages in favor of in-state or in-territory producers unless the State or territory can demonstrate that the challenged law advances a legitimate local purpose that cannot be adequately served by reasonable non-discriminatory alternatives.”
Tom Wark, the author of Fermentation: The Daily Wine Blog, recently posted an article analyzing the text of the newly-constructed H.R. 5034. In his article, Mr. Wark also mentions the effects this revision will have on the wine industry. The article, as well as his blog, is a highly recommended read and can be accessed at New All Out Attack On Wine Merchants Launched With H.R. 5034.
An additional resource for winery-friendly information is Free the Grapes. Free the Grapes allows individuals to personalize a letter to congressional representatives who support of H.R. 5034.
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by Lindsey A. Zahn on September 16, 2010
When considering international relations with respect to the wine industry, most literature recites the Agreement on Trade-Related Aspects of Intellectual Property Rights (commonly called the “TRIPS Agreement”). Generally speaking, the TRIPS Agreement creates standards of intellectual property (“IP”) regulation amongst other members of the World Trade Organization (“WTO”). This agreement is the first multilateral agreement organized by the WTO that explicitly establishes global protection for geographic indications (“GIs”) for wines produced throughout the world. The Agreement recognizes appellations of origin, which, in the wine industry, is a name used on wine products to designate the specific geographical region in which they are produced. There is much reasoning for recognizing GI protection internationally, but the dominant arguments propose preservation of wine quality and/or reputation and reduction of wine fraud.
There are three articles under the TRIPS Agreement that concern GIs and specifically apply to the wine industry. These articles are Article 22, Article 23, and Article 24. Article 22 of the TRIPS Agreement provides general protection for GIs, Article 23 creates a protection specifically for the GIs of wines and spirits, and Article 24 establishes a duty for countries that are parties to the Agreement to continually negotiate to expand protection for GIs of wines and spirits.
Article 22 of the Agreement reads as follows:
Article 22—Protection of Geographical Indications
1. Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.
2. In respect of geographical indications, Members shall provide the legal means for interested parties to prevent:
(a) the use of any means in the designation or presentation of a good that indicates or suggests that the good in question originates in a geographical area other than the true place of origin in a manner which misleads the public as to the geographical origin of the good;
(b) any use which constitutes an act of unfair competition within the meaning of Article 10bis of the Paris Convention (1967).
3. A Member shall, ex officio if its legislation so permits or at the request of an interested party, refuse or invalidate the registration of a trademark which contains or consists of a geographical indication with respect to goods not originating in the territory indicated, if use of the indication in the trademark for such goods in that Member is of such a nature as to mislead the public as to the true place of origin.
4. The protection under paragraphs 1, 2 and 3 shall be applicable against a geographical indication which, although literally true as to the territory, region or locality in which the goods originate, falsely represents to the public that the goods originate in another territory.
In summary, Article 22 defines GIs within the context of the Agreement and requires countries who are parties to the Agreement to supply legal means to prevent the use of false GIs on products that would mislead the public with respect to the product’s true geographical origin. Article 22 additionally requires parties of the TRIPS Agreement to either refuse or invalidate registration of any trademark that includes or is composed of a GI that would mislead the public as to the product’s true geographical origin.
Article 23 of the Agreement reads as follows:
Article 23—Additional Protection for Geographical Indications for Wines and Spirits
1. Each Member shall provide the legal means for interested parties to prevent use of a geographical indication identifying wines for wines not originating in the place indicated by the geographical indication in question or identifying spirits for spirits not originating in the place indicated by the geographical indication in question, even where the true origin of the goods is indicated or the geographical indication is used in translation or accompanied by expressions such as “kind”, “type”, “style”, “imitation” or the like.
2. The registration of a trademark for wines which contains or consists of a geographical indication identifying wines or for spirits which contains or consists of a geographical indication identifying spirits shall be refused or invalidated, ex officio if a Member’s legislation so permits or at the request of an interested party, with respect to such wines or spirits not having this origin.
3. In the case of homonymous geographical indications for wines, protection shall be accorded to each indication, subject to the provisions of paragraph 4 of Article 22. Each Member shall determine the practical conditions under which the homonymous indications in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled.
4. In order to facilitate the protection of geographical indications for wines, negotiations shall be undertaken in the Council for TRIPS concerning the establishment of a multilateral system of notification and registration of geographical indications for wines eligible for protection in those Members participating in the system.
Essentially, Article 23 requires parties to the Agreement to create laws that prohibit the use of false GIs on wines and spirits, even if the true geographical origin of the wine or spirits product is indicated. Article 23 goes so far as to prohibit the use of false GIs on wines and spirits products that use expressions such as, “kind,” “type,” “style,” “imitation,” or the like such as to indicate that the wine or spirits product is not the same as that wine or spirits product with the true GI. The Article additionally calls for the refusal or invalidation of trademarks that include or are composed of a GI identifying wines or spirits that do not originate in the geographic region indicated.
The key to Article 23 that separates it from its predecessor Article 22 is that Article 23 does not require a trademark to be “misleading” for Article 23 to be invoked. On the contrary, it is only when homonymous GIs are used for wines or spirits products that products may be considered misleading. Finally, Article 23 requires the Council of TRIPS to undertake additional negotiations to create a “multilateral system of notification and registration” with respect to GIs for wines.
Article 24 of the Agreement reads as follows:
Article 24—International Negotiations; Exceptions
1. Members agree to enter into negotiations aimed at increasing the protection of individual geographical indications under Article 23. The provisions of paragraphs 4 through 8 below shall not be used by a Member to refuse to conduct negotiations or to conclude bilateral or multilateral agreements. In the context of such negotiations, Members shall be willing to consider the continued applicability of these provisions to individual geographical indications whose use was the subject of such negotiations.
2. The Council for TRIPS shall keep under review the application of the provisions of this Section; the first such review shall take place within two years of the entry into force of the WTO Agreement. Any matter affecting the compliance with the obligations under these provisions may be drawn to the attention of the Council, which, at the request of a Member, shall consult with any Member or Members in respect of such matter in respect of which it has not been possible to find a satisfactory solution through bilateral or plurilateral consultations between the Members concerned. The Council shall take such action as may be agreed to facilitate the operation and further the objectives of this Section.
3. In implementing this Section, a Member shall not diminish the protection of geographical indications that existed in that Member immediately prior to the date of entry into force of the WTO Agreement.
4. Nothing in this Section shall require a Member to prevent continued and similar use of a particular geographical indication of another Member identifying wines or spirits in connection with goods or services by any of its nationals or domiciliaries who have used that geographical indication in a continuous manner with regard to the same or related goods or services in the territory of that Member either (a) for at least 10 years preceding 15 April 1994 or (b) in good faith preceding that date.
5. Where a trademark has been applied for or registered in good faith, or where rights to a trademark have been acquired through use in good faith either:
(a) before the date of application of these provisions in that Member as defined in Part VI; or
(b) before the geographical indication is protected in its country of origin;
measures adopted to implement this Section shall not prejudice eligibility for or the validity of the registration of a trademark, or the right to use a trademark, on the basis that such a trademark is identical with, or similar to, a geographical indication.
6. Nothing in this Section shall require a Member to apply its provisions in respect of a geographical indication of any other Member with respect to goods or services for which the relevant indication is identical with the term customary in common language as the common name for such goods or services in the territory of that Member. Nothing in this Section shall require a Member to apply its provisions in respect of a geographical indication of any other Member with respect to products of the vine for which the relevant indication is identical with the customary name of a grape variety existing in the territory of that Member as of the date of entry into force of the WTO Agreement.
7. A Member may provide that any request made under this Section in connection with the use or registration of a trademark must be presented within five years after the adverse use of the protected indication has become generally known in that Member or after the date of registration of the trademark in that Member provided that the trademark has been published by that date, if such date is earlier than the date on which the adverse use became generally known in that Member, provided that the geographical indication is not used or registered in bad faith.
8. The provisions of this Section shall in no way prejudice the right of any person to use, in the course of trade, that person’s name or the name of that person’s predecessor in business, except where such name is used in such a manner as to mislead the public.
9. There shall be no obligation under this Agreement to protect geographical indications which are not or cease to be protected in their country of origin, or which have fallen into disuse in that country.
In summary, Article 24 obligates parties to the Agreement to enter into negotiations with the goal of increasing protection for GIs of wines and spirits. Section One of Article 24 specifically apprises that countries that are parties to the Agreement are prevented from using the exceptions outlined in further provisions of Article 24 to avoid ensuing negotiations. Section Two of Article 24 allows the Council for TRIPS to review implementation of such provisions outlined under Article 24 and allows same to take action, upon agreement, to promote and advance the objectives of Article 24. Additionally, Article 24 prohibits countries that are parties to the Agreement from reducing protection for GIs that existed prior to the enforcement of the TRIPS Agreement. (This provision serves to provide greater protection for GIs.)
There is a multitude of parties to the TRIPS Agreement and even additional literature that has been written with respect to its enforcement and its provisions. Some literature argues that the United States is not in compliance with the TRIPS Agreement, specifically in terms of GI protection of wines and spirits. Given Australia’s recent ratification of the EU-Australia Wine Trade Agreement, irrespective of much pressure throughout the wine industry to enforce international protection of GIs of wines and spirits, it is not likely these contentions will fade. Regardless, the TRIPS Agreement remains the preeminent agreement among the international community with respect to preserving GIs of wines and spirits.
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by Lindsey A. Zahn on September 12, 2010
On September 3, 2010, the San Diego Citizenry Group, on behalf of various property owners throughout San Diego, brought suit against San Diego County’s Board of Supervisors challenging a new ordinance approved on August 4, 2010. The ordinance reportedly creates a more manageable process for wine growers to open wine-tasting rooms and create small wineries in unincorporated parts of the region. In filing suit against the County, the San Diego Citizenry Group alleged that the ordinance was passed without a proper environmental study. “Residents are particularly concerned about additional traffic on rural roads and the amount of water the wineries would need to operate.” (See Group Sues County on New Winery Policy.) Additionally, the San Diego Citizenry Group claims the County ignored issues and other impacts when it implemented the ordinance; according, the Group asks that the supervisors’ vote be annulled and the ordinance be appraised thoroughly before additional action is taken.
Ostensibly, the ordinance, which was originally proposed in October 2007, creates a layered system that allows property owners of areas zoned for agriculture to set up businesses to grow, produce, and sell wine to wineries. Additionally, these properties could produce up to 120,000 gallons of wine each year, open a tasting room without securing a major-use permit, and hold onsite events, including weddings.
A court date is not currently scheduled, but once more information is available, On Reserve will post updates accordingly.
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by Lindsey A. Zahn on September 9, 2010
One of my favorite wineries on the North Fork of Long Island (and trust me, it can be difficult at times to choose) is One Woman Wines & Vineyards. As a woman who values architectural beauty and ambience during her wine tastings, my list of favorites generally reflects larger Long Island producers who house their wines in aesthetically-pleasing, Architectural Digest-worthy properties, including Wölffer Estate Vineyard, Bedell Cellars Winery, and Raphael. Claudia Purita of One Woman, however, wins her place on my favorites list for complete uniqueness. As a producer of only four wines (a reserve chardonnay, chardonnay, rosé, and gewurztraminer—each of which is purely sensational), Ms. Purita blends her Italian heritage with hospitality.
Put aside complex legal business structures and much of the theatrics of family-owned wineries, One Woman Winery is entirely what she claims to be: owned and operated by one woman. Operating out of a small, red-painted structure resembling a one-room schoolhouse, and altogether off of the “path” of North Fork wine country, One Woman Winery honors solitude through its rather rustic placement and framework. A great place to visit and receive truly hands-on learning about wine tasting or the wine products of Ms. Purita, One Woman’s tasting room contains nothing more than a wooden plank separating guests from its wines. But anything more would be unnecessary; the wines speak for themselves.
The estate reserve chardonnay is my favorite, priced at $40 a bottle. Before a taste, one can even smell butterscotch from the glass of this complex, rich and well-structured wine. The bouquet is crafted with honeysuckle, lemon, vanilla, and toast and fermented in French oak (a rarity for most Long Island wines). And, before the grapes are picked, they are given an extra two weeks of hang time and rotting pairs are removed by hand with tweezers. Ms. Purita produces only 202 cases of her reserve chardonnay per year, emphasizing her appraise of solitude.
One Woman’s regular chardonnay is not nearly as complex, but features a lively structure of citrus notes and vanilla and is fermented in both steel and wood barrels. Her gewurztraminer is perhaps one of the best Long Island bouquets I have tasted; its body is light and well-balanced, featuring notes of florals, lychee, and fruits. Its bouquet is, like many other Long Island white wines, fermented in steel barrels. Finally, her 100% merlot rosé features a crisp but dry complexity for a rosé with tropical notes. It is a blend of cluster pressed and saigneed juice under two different fermentation techniques.
It is truly no surprise that One Woman Winery’s estate reserve chardonnay is featured at venues including the Four Seasons and the Waldorf=Astoria, in addition to BLT Steak.
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by Lindsey A. Zahn on September 7, 2010
Just to clarify a prior post of On Reserve, the 1994 wine agreement between the European Community and Australia that prevented Australia from producing wine of particular GIs did name several of the wines mentioned in the most recent agreement between the two powers. These GIs, under Article 8 of the 1994 agreement, did not portray a date by which Australia would transition from the use of such GIs. (Additional GIs were named under Article 8 that given a named transition period in the 1994 agreement.) The GIs named under the 1994 agreement that were not given a date of transition, and have been re-named in the most recent agreement, include the following:
- Burgundy
- Chablis
- Champagne
- Claret
- Graves
- Marsala
- Moselle
- Port
- Sauternes
- Sherry
- White Burgundy
This is a preview of
Agreement Between Australia and the European Community on Trade in Wine
.
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