Mondavi Sues California ABC Over Locator Law

Jeff Morgan
Posted: August 9, 1999

Should a winery be prohibited from telling consumers how to locate a wine shop that carries its wines? The Robert Mondavi Winery doesn't think so, and it has filed suit against the California Department of Alcoholic Beverage Control to challenge state law on the subject.

Many wineries routinely tell their customers where they can find a particular wine. But Mondavi ran into a problem early this year when it added a search feature to its Web site that would help consumers locate nearby retailers that carry specific Mondavi wines. The California ABC forced Mondavi to temporarily shut down that section of its site for violating a state law that forbids a winery from giving anything of value to a retailer. The ABC interpreted Mondavi's wine-shop locator as a gift of free advertising to the retailers on the list.

In June, Mondavi filed suit in California's state appeals court, hoping to get a clarification of the existing laws. The company's action has the support of other Napa Valley wineries, such as Joseph Phelps, Groth and Cakebread, who have filed "friend of the court" briefs in the case.

Mondavi resorted to the lawsuit after an earlier attempt to amend the existing law in the state legislature stalled. Mondavi had allied itself with several winery trade associations, including the San Francisco-based Wine Institute, and asked California state Sen. Wesley Chesbro to rectify the situation. In February, Chesbro introduced a bill that would permit wineries to list their retailers, but he later cancelled the bill's first scheduled hearing, after the Wine Institute withdrew its support only a few days before the May date.

"Certain issues put [the bill] out of compliance with federal laws," explained Sacramento-based Wine Institute lobbyist Mike Falasco. For example, Chesbro's bill permitted listings of retailers' prices, which is prohibited under federal law. His bill also did not specify the number of retailers that could be listed, while federal law forbids promotional references to only one retailer or retail chain, but it allows multiple listings -- which would legalize Mondavi's extensive Web site locator.

Because differing state and federal laws could create confusion and legal hazards, the Wine Institute has been trying to address these issues, and a subcommittee chaired by Sonoma County vintner Louis Foppiano met on Aug. 4. "I think we've got a really good solution," Foppiano said. "We're going to suggest that Chesbro change his bill to simply adopt federal regulations."

Meanwhile Mondavi's suit against the ABC is pending. "We don't know when it's going to be resolved," said Herb Schmidt, vice president of public affairs at Mondavi. "The ABC goes at its own speed."

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January 23, 1999
Mondavi Adds Retailer Search to Web Site