Responding to industry concerns that the current packaging of flavored wines can confuse consumers, the Bureau of Alcohol, Tobacco and Firearms has proposed new labeling guidelines for such products.
The BATF's notice of proposed rulemaking, issued on Dec. 28, has been more than two years in the making. In 1997, advocacy groups such as the Wine Institute and the California Association of Grapegrowers first contacted the BATF to voice concerns that the labels of flavored wines can mislead consumers and harm the varietal wine industry.
Many Central Valley growers fear that the success of flavored wines -- which often have water and sugar added -- will reduce demand and prices for their grapes, while some North and Central Coast wineries believe that the use of varietal names on such formulated products could hurt the overall reputation of California wines.
Any American wine that carries a varietal label must be at least 75 percent by volume of the named grape. However, beverages formulated with water, sugar, fruit flavors and a small amount of wine can currently be sold as "grape wine with natural flavors." Such products can even bear varietal labels, such as "Merlot with natural flavors," if 75 percent of the wine used in the blend is Merlot.
The BATF proposal would close existing legal loopholes by requiring any such beverage to be labeled with the phrase "flavored wine product." Varietal names could be used only if the designated grape constitutes at least 75 percent of the beverage by volume. Labels would also have to clearly identify additional flavoring material or wine types (such as "peach wine"), and state whether water, sugar and wine spirits are used in the blend. In addition, the labels could not list an appellation any smaller than the country of origin.
The BATF is seeking comment on the proposal until March 28, and a final ruling could take six to 12 months.
Wendell Lee, counsel for the San Francisco-based Wine Institute, a winery trade group, expressed surprise at the breadth of the proposal. "This ends months of speculation," he said. "This is very far-reaching and much broader than what we had proposed."
A consumer survey commissioned by the BATF revealed that current labeling is too confusing, according to Edward Reisman, a BATF specialist in the product compliance branch. As a result, the proposal would ban the use of the term "natural" to describe any flavoring materials. "We were trying to look at the marketplace and the products out there, while also anticipating future products," said Reisman.
Jon Moramarco, CEO of Canandaigua Wine Co. -- maker of the Almaden line, which includes flavored wines -- said that the BATF action is ill-conceived. "We believe the proposed regulations are unnecessary and may have unintended consequences if adopted," said Moramarco, who fears that imported products not subject to BATF rules would gain an unfair competitive advantage. Annual sales of Almaden account for about $50 million, or 2 percent of Canandaigua's net revenue, according to Kristen Jenks, Canandaigua's director of investor relations.
Even those in the wine industry who applaud the proposal acknowledge that several issues have to be addressed. "The proposal is unclear about whether flavored wine products could use vintage dating," said Lee. "We also need to consider transition times. Given the breadth of the proposal, there should be some provision for a logical, reasonable phase-out of old labels."
Another issue of contention is that low-alcohol flavored wine beverages, such as Canandaigua's Arbor Mist and Gallo's Wild Vines, do not fall under ATF jurisdiction and are instead regulated by the Food and Drug Administration. Tom Shelton, president of the Napa Valley Vintners Association, another winery advocacy group, said, "We'll have to wait for the FDA to rule on the fruit-juice-based products."
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