May 2011

On Reserve’s Parting Words Before a Trip to Champagne, France

by Lindsey A. Zahn on May 31, 2011

DSC 0086 On Reserves Parting Words Before a Trip to Champagne, FranceOn Reserve entries will soon pause for several weeks as I explore the great wine region of Champagne, France and attend the 2011 Wine and Law Program. Whereas On Reserve entries may stop shortly, my curiosity with respect to wine and the law will not cease even for a moment while I am abroad; I will return with more stories to share and an excellent education in wine and the law. Additionally, On Reserve will feature its first guest author, who will recount her time at the U.C. Davis Wine and Law Conference.

Before I part, however, I would like to share with all of you an incredible accomplishment that I am very excited about. During this last year of law school, I wrote a Note, Australia Corked its Champagne and So Should We: Enforcing Stricter Protections of Semi-Generic Wines in the United States, on wine and aspects of intellectual property and international wine trade. I submitted my Note to the Trandafir Writing Competition for international business law and it won the 2010–2011 Trandafir International Business Writing Competition. My Note will be published in the twenty-first volume of the University of Iowa’s Transnational Law & Contemporary Problems. Whereas I knew about this great honor several weeks ago, the University of Iowa just made a public announcement on its website, accessible at Trandafir Writing Competition 2010–2011 Competition Winner. Announcing this on the blog could not come at a more appropriate time, as On Reserve is just one entry shy of its 100th entry.

It has been a wonderful year with On Reserve and I look forward to many more years, sharing wine law information with all of you! Thank you for your incredible support and interest throughout the last year and I look forward to returning from France with much material to cover.

Photograph property of Lindsey A. Zahn; Lenz Winery in Peconic, NY.

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A Note on the Labeling of Wine in the United States

by Lindsey A. Zahn on May 22, 2011

Labeling wine (or what appears to be wine) in the United States can often times prove to be quite confusing. Generally speaking, the Alcohol and Tobacco Tax and Trade Bureau (hereinafter “TTB“) of the U.S. Department of Treasury (or, formally, the Bureau of Alcohol, Tobacco, and Firearms, hereinafter “BATF”) has jurisdiction over the labeling of alcoholic beverages. This jurisdiction derives from a federal statute called the Federal Alcohol Administration Act, 27 U.S.C. § 201 et seq. (See Federal Alcohol Administration Act.) However, it is important to note, in the context of wine, the TTB only regulates wine products that contain seven percent or more alcohol by volume. This is an important distinction when labeling products as wine and conforming to the provisions set forth by the TTB, as they differ from those for wine products containing less than seven percent alcohol by volume.

How are wine products containing less than seven percent alcohol regulated in the United States?

Wine products containing less than seven percent alcohol by volume are regulated by the Food and Drug Administration (hereinafter “FDA”). These products include wine coolers and flavored wine that contain less than seven percent alcohol by volume. Wine beverages with less than seven percent alcohol that purport to contain unfermented fruit or vegetable juice are governed by 21 C.F.R. § 101.30 and must declare the percentage juice. (See Percentage Juice Declaration for Foods Purporting to be Beverages that Contain Fruit or Vegetable Juice.) Wine beverages with less than seven percent alcohol that do not contain unfermented fruit or vegetable juice are not governed by this statute unless they purport to contain juice through advertising, the product’s label, vignettes, or physical characteristics of the product. Beverages containing less than seven percent alcohol by volume are “require[d to include] nutritional information, including calorie counts, to appear on the label. Malt beverages, including beer, are not required under federal law to carry this information, or list the alcohol content” on their labels. (See The Changing Face of the Beer Bottle.) Wine products containing less than seven percent alcohol by volume must include calorie counts and may list alcohol percentage. Contrast this with wine products containing between seven percent and fourteen percent alcohol by volume, which may include calorie counts and must list alcohol percentage under TTB regulations. However, there is some literature that postulates these regulations might change, but no action has been taken presently. (See generally, Why Don’t Beer, Wine, and Alcohol Have Nutrition Fact Labels?)

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Last Day to Register for UC Davis Wine Law Conference is May 24th

by Lindsey A. Zahn on May 19, 2011

I already posted an article (See UC Davis to Host Upcoming Wine Law Seminar on Appellations and Wine Trade Names) with respect to the upcoming wine law conference, Toward a Common Standard: New European Union Label Laws and Geographic Indicators of Origin, hosted by University of California Davis, but Whitney Denning of UC Davis contacted me today and kindly asked me to list this event once more. In the process of reviewing the program again, I was reminded of how interesting the topics are and I am contemplating attending the conference myself, but I am not positive I will have the time to make a trip to California with my upcoming excursion to France shortly thereafter. Irrespective, On Reserve will have coverage of the event’s discussions by a fellow wine law enthusiast.

The conference has three half-day sessions and “include[s] specific presentations and time for audience discussion. The first session sets the stage to discuss the E.U. label changes and the implications for U.S. wine producers. The second session focuses on government control of label fraud, including discussion of producer criminal liability. The third session addresses the future by examining how U.S. and E.U. wine-label law can become more compatible.” (See Toward a Common Standard: New European Union Label Laws and Geographic Indicators of Origin.) There are also several optional conference packages, including a networking dinner at Season’s Restaurant on June 3rd and an excursion to Napa on June 4th.

The UC Davis conference is from June 2nd to June 4th at the Robert Mondavi Institute for Wine & Food at the University of California Davis campus. The deadline to register for the conference is May 24, 2011. For information regarding registration and optional conferences, you can contact Whitney Denning at lawinfo@ucde.ucdavis.edu or 530.757.8569. To read more about the event, visit Toward a Common Standard: New European Union Label Laws and Geographic Indicators of Origin.

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Canadian Radio Host Terry David Mulligan Protests Outdated Prohibition-Era Wine Laws

by Lindsey A. Zahn on May 18, 2011

To protest what he believes to be an outdated, Prohibition-era law, radio host Terry David Mulligan “carried a wooden case containing nine bottles of wine and one bottle of Penticton beer across the Alberta-B.C. border at noon on Friday.” (See Radio Host Mulligan Protest Provincial Liquor Laws.) Despite planning his illegal conduct well in advance and notifying the liquor control boards of his intended actions, as well as even publicizing his scheme in several online publications, Mr. Mulligan was not arrested in the process of carrying the wine and beer. (See prior On Reserve entry Canada Fights Outdated Prohibition-Era Wine Law.) “Nor were any members of the RCMP or local liquor boards on hand to witness the well-known broadcaster’s act of civil disobedience.” (See Radio Host Mulligan Protest Provincial Liquor Laws.)

The purpose of Mr. Mulligan’s demonstration was to fulminate against an eighty-three-year-old, Prohibition-era law, a law he and many other Canadians feel to be outdated. The federal law makes it illegal to cross provincial borders while carrying alcohol. In order to receive out-of-province liquor and alcoholic beverages, a customer must order such from its local liquor control board. “Mulligan contends the practice, which often includes a stiff markup, is an attempt to keep consumers under the heel of the provincial boards.” (Id.) He asserts that if France had a similar regulation to that of Canada, there would be a revolution.

Sergeant Patrick Webb said that, despite being aware of Mr. Mulligan’s conduct, there was no plan to have RCMP waiting to arrest or charge Mr. Mulligan for his illegal conduct. Sergeant Webb stated that the RCMP is looking at potentially pressing charges, but prosecuting Mr. Mulligan does not seem to be within the public interest of Canadians. Webb added that, in his thirty years with the RCMP, he has not known of anyone to be be charged under the federal Importation of Intoxicating Liquors Act.

Legally, what does this mean for Canada? It seems that even law enforcement agrees that the Importation of Intoxicating Liquors Act may be trivial or obsolete given the country’s current conditions. However, law enforcement is not the proper avenue for this law to be amended or repealed—Canadians should, instead, look to their legislators for appropriate legal changes. It is considerable, though, that Canada may see changes to this law if enough attention was brought to legislators with respect to Mr. Mulligan’s act and consideration is given to the public interest of Canada.

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Progressive Change for Polish Winemaking Laws

by Lindsey A. Zahn on May 17, 2011

Note: Unfortunately, I was unable to find more information on this alert other than one article. However, I found the topic interesting enough to post as a wine law update, as I have never come across Polish wine law in my studies. If you are familiar with this new provision, or have any other details regarding this topic, please e-mail me at lazahn@winelawonreserve.com.

A progressive change is in store for Polish winemakers: Polish winemaking law has reportedly been liberalized to allow a significant modification in practice for Polish winemakers. Polish Parliament approved an amendment to the Act on the Production and Bottling of Wine that assimilates Polish law to contemporary European regulations. The amendment repeals an existing law from 2004 and will come into effect fourteen days from the date of its publication. Accordingly, under the new law, Polish farmers will be able to sell their own fruit and grade wines and without registering as a business.

The Roman Grad President of the Zielona Góra Winemaking Association of Poland indicated that the new Act is beneficial to wine producers in Poland and will help strengthen the Polish winemaking industry. (Zielona Góra is a city in Lubusz Voivodeship in western Poland. It is particularly known for its wineries with its first winery built around 1314. The number of vineyards in the region at peak production is estimated to be 4,000 with 2,500 in Zielona Góra alone.) It has long been the aim of the Zielona Góra Winemaking Association to attain such legal resolution, as the Association firmly believes this will enhance Polish’s wine industry as well as improve the attractiveness of the Zielona Góra region to potential grape growers and wine producers. The President explained that, in Poland, to produce 100 hectoliters of wine requires two acres of vineyard, and very few farms in Poland are this size. “He added that some farmers have barely few-acre vineyards and treat the production of wine as a hobby.” (See Polish Market Online: Polish Winemaking Law Liberated.) The President predicts that the new rules will allow the sale of homemade wine in, “for example, agritourist farms, which will give additional income to farmers. It will also be possible to purchase homemade grape wine directly from the manufacturer—straight from the barrel.” Sale of the wine, as well as bottling, will also be allowed in local stores and restaurants.

(Source: Polish Market Online: Polish Winemaking Law Liberated.)

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San Diego Superior Court Rules in Favor of Tiered Winery Ordinance

by Lindsey A. Zahn on May 16, 2011

Special thanks to Dennis from Eagles Nest Winery in San Diego, California for pointing out this new update with respect to a suit filed by San Diego Citizenry Group challenging the San Diego County Tiered Winery Ordinance under the California Environmental Quality Act (CEQA) (See prior On Reserve entry Group Sues San Diego County on New Winery Policy). (See also Dennis’ post discussing the matter at Update: Politics of Wine — Tasting Rooms Vindicated in San Diego Wine Country — the Tiered Winery Ordinance of 2010.) In September 2010, the San Diego Citizenry Group brought suit against San Diego County’s Board of Supervisors challenging the new ordinance approved on August 4, 2010. “This hard-fought ordinance was over four years in the making, and was finally passed unanimously by the Supervisors.” (Id.) 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 and indicated that San Diego residents were concerned about the additional traffic flow and the amount of water the wineries would require for operation. However, in April 2011, the Superior Court of California ruled that the county met its burden under the CEQA.

On Thursday, April 14, 2011, after a hearing by both sides, Judge Timothy Taylor of the Superior Court of California issued a temporary ruling in favor of the county after a hearing took place in his courtroom. On Friday, April 15, 2011, following the issuance of the tentative hearing, both parties were given an opportunity to plead their cases based on issues raised in the tentative hearing. After the rebuttal, the judge indicated he would take the points of each party into consideration and issue a final ruling. In his final decision, the judge ruled in favor of the county. Judge Taylor stated in his opinion, “The court find that the case lacks merit, and therefore denies same. The court also orders petitioner to pay the cost of preparation of the extensive administrative record.”

The main issue of the disagreement was whether the county of San Diego, in creating the ordinance, properly complied with the CEQA, which entailed the preparation of an Environmental Impact Report (EIR) (See §21061 of the CEQA for the definition of an EIR). Judge Taylor’s ruling cited case law that maintains the county did, indeed, comply with the CEQA. In his ruling, Mr. Taylor wrote that, “Having reviewed the EIR, the court finds that it suffices as an informational document. The Board of Supervisors was, by the EIR, adequately informed about the consequences of its decisions. The public (including petitioner) was provided with adequate information regarding the decisions of their elected leaders. That is where the judicial inquiry under CEQA ends; any further remedy for petitioner (or those who share its views regarding wineries in the backcountry of San Diego County) lies at the ballot box when the Supervisors stand for re-election.” (Id.) In addition, the court found “that the county made adequate inquiry into possible future development of wineries, that its conclusions regarding mitigation measures was adequate and based on substantial evidence, and that the county properly identified, compared, analyzed and found infeasible the project alternatives.”(See Court Rules in Favor of County’s Tiered Winery Ordinance.)

The San Diego Citizenry Group was ordered to reimburse the County $16,444.00 for “the cost of preparation of the extensive administrative record.” (Id.) Whereas Carolyn Harris, the general counsel for Ramona Valley Vineyard Association, asserts that she is pleased with the outcome and is excited for the opening of additional tasting rooms in San Diego County, Chris Polychron, who represented the San Diego Citizenry Group, is disappointed and is considering the alternative options of his client.

This strong win for San Diego County wineries, however, does not seem to be the end of wine politics. Interestingly, “[b]arring an appeal, area wineries continue to face costly and prohibitive building permit mandates by the County Department of Planning and Land Use (DPLU). This is the next issue that the Supervisors will need to address. Sadly, the local building industry would benefit from these projects if excessive standards were not forward upon Boutique Wineries.” (See Update: Politics of Wine — Tasting Rooms Vindicated in San Diego Wine Country — the Tiered Winery Ordinance of 2010.)

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