Call it a tale of two judgments: conflicting standards about wine appellations applied to a high-stakes court case and a high-profile international trade agreement.
The court case, now in its fifth year, is Bronco v. Jolly, which will determine if wine brands with "Napa" in the name must contain Napa grapes. The trade pact is the recent agreement, more than 20 years in the making, between the U.S. and the European Union that addressed (among many other topics) the use of names like Burgundy and Champagne on U.S. wines.
As things now stand, it's clear that the judges and trade reps were not comparing notes; in fact, they came down on opposite sides of the fence.
The last court of record, the Third District Court of Appeal in Sacramento, ruled in favor of the sanctity of the Napa appellation. If that stands, it means that Ceres, Calif.-based Bronco Wine Co., the mass-market behemoth behind Charles Shaw (a.k.a. Two-Buck Chuck) can no longer sell Central Valley wines under labels such as Napa Ridge and Rutherford Vintners.
A different line of reasoning apparently dictated the trade negotiations. The agreement relegated some of Europe's most renowned viticultural regions to a communal trough from which U.S. vintners can keep gorging with brand names like Hearty Burgundy and Chablis.
The pact still needs approval from the respective governments, which is likely but not guaranteed with the EU hydra. Bronco v. Jolly isn't yet sealed in stone, either, but the mortar is starting to dry; according to a source familiar with the case, Bronco will take its last shot and file an appeal with the U.S. Supreme Court, which accepts only about 100 out of 8,000 cases submitted to it each year. Judging strictly by the numbers, Bronco's prospects sit somewhere between slim and none.
So, right now Bronco CEO Fred Franzia isn't smiling, especially with the trade pact jammed in his craw. It's true that U.S. regulations usually require that at least 75 percent of the grapes in a wine with a geographic brand name come from the referenced region. But a federal grandfather clause exempts brands, such as Bronco's, that existed prior to July 1986. That's why Franzia paid $40 million in January 2000 to acquire Napa Ridge from Beringer.
I'd argue that money trumped truth when that grandfather clause slid into the federal regulations, and that it didn't serve the best interests of consumers. But it was U.S. law. And that's pretty much the foundation of the trade pact. In 1948, the U.S. Treasury Department officially sanctioned the concept of so-called "semi-generics," 16 wine names approved by the Treasury Deputy Commissioner. The list of recognized semi-generics includes Burgundy, Champagne, Chianti and Port.
The apparent rationale was that those terms, and the U.S. wines that use them, had such widespread and/or longstanding market presence that they connote a type as well as a region. But the implication of that reasoning seems to be that the world's most celebrated viticultural areas are candidates for semi-generic status by virtue of their success. Precise figures are unavailable, but it's worth noting that semi-generics constitute a formidable chunk of the U.S. wine market, with estimates ranging between 20 and 40 percent.
The federal regulations require that semi-generic labels include the true appellation, thereby purportedly reducing consumer confusion. And that's exactly what Bronco does—indicating "Lodi" or other sources under the brand names—and why they've argued throughout the case that their brands do not confuse consumers.
But the Third District Court of Appeal isn't buying. In its May decision, the court opined that having the correct appellation doesn't offset the false impression created by a mis-descriptive brand name. "The clear implication from such brand names is that the wine is made from Napa Valley grapes and is of premium quality ... Bronco's actions belie its claim that using its brands on wine produced with non-Napa Valley wine is not misleading."
After learning of the trade pact, Franzia and his lawyers had to wonder what's wrong with this picture. The difference is that Napa isn't on the list of recognized semi-generics. But even if we agree to start on the wrong foot by accepting semi-generics, it's still fair to suggest that the list in Title 27, Chapter 1, Part 4.24 of the Code of Federal Regulations didn't come straight from the throne of God.
At present, no wine region on earth can match Napa's mind share with the American consumer. If Burgundy (red and smooth, I suppose) and Sauterne/Haut Sauterne (white and sweet) make the cut, why not red and rich Napa?
The pact limits semi-generics to brands already in existence by Dec. 13, so it's not a blank check. Nor can U.S. vintners sell those wines in Europe. But this sure seems like another triumph of money (gargantuan producers dominating the domestic market) over truth (if it's not from Champagne, Champagne shouldn't be on the label).
U.S. trade reps, and the companies concerned, emphasize that semi-generic terms have existed here for 200 years. But a 200-year-old theft is still theft. The mansion on the corner might indeed be stately, but it doesn't change the fact that it was built with stolen lumber.
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