ARTICLE

Originally published in Vineyard & Winery Management - Mar/Apr, 2001

I have been around the block more than a few times with the establishment of American Viticultural Areas. Beginning in 1983, I have written successful petitions to establish five areas and amend three others, and advised petitioners regarding several proposed areas. I have also studied the evidence for many existing areas, and have watched the continuing developments in this field with great interest.

The next two Compliance Watch columns, starting with this issue, are devoted to sharing the fruits of nearly two decades experience with the controversial and fascinating field of viticultural areas.

I am a big believer in the importance of appellation —the bit of information on a wine label that discloses where the grapes were grown. For winegrowers and vintners in America, marketing by appellation has many advantages in today's global marketplace.

I realized just how important appellation is several years ago, while attending a meeting of grape growers as a panelist. The importation of inexpensive bulk foreign wine had became popular, and much of the discussion revolved around the growers' legitimate concerns about their offshore competition. It became clear that only one thing would ultimately level the playing field: an emphasis on "location, location, location"!

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The importance of appellation

It is more than a simple case of a grower's "dream come true" when a wine lover searches the shelf for a wine from Carneros or Willamette Valley. Nowadays, a consumer can choose among wines of the same varietal hailing from many parts of the world —and many of the foreign wines are less expensive than their domestic counterparts. Growers from low yielding premium areas, and the wineries who buy from them, are at a competitive disadvantage unless appellation labeling tells a knowledgeable consumer that a more expensive wine may be a better value.

Many of the wine drinkers in the world, and certainly the most sophisticated ones, are accustomed to selecting wines by their origin. Under the European system of labeling, wines have traditionally been described not by varietal but by place of origin. Even today, when varietal labeling has become more common in Europe, place of origin still takes precedence in importance.

Judging by the industry's ongoing interest in establishing and fine tuning American Viticultural Areas (AVAs), it appears that many share my conviction about the importance of appellation. Although the process of defining AVAs has been going on for twenty years now, the pace has not slacked off. At last count, there were 137 existing AVAs, and ATF was considering petitions to establish or amend no fewer than 12 viticultural areas.

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Various types of appellations

There are several ways to label appellation of origin. It can be indicated by the name of a country, a state, a county, or, under certain conditions, multiple states or counties. All these choices involve politically defined regions.

To use a name other than a political subdivision as an appellation of origin on domestic wine, it must be approved by ATF as an American Viticultural Area. Although the process can be difficult and very time consuming, the promotional and informational value of a new AVA makes the effort and waiting all worthwhile. Not only does the AVA open up new marketing opportunities, but the prestigious term "estate bottled" may only be used on wines bearing an AVA as the appellation of origin.

The basics of establishing an AVA:

The process of establishing an AVA starts by submitting a petition to ATF which includes the following information:

The approval process normally takes at least a year and has been known to take two or three years —or more. The shortest approval time I am aware of was an amendment to the Chalk Hill viticultural area several years ago which sailed through in 9 months, partly due to unanimous support from growers and wineries in the area.

Factors that determine the length of the approval process include:

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ATF's approval process

Each AVA petition travels a long a winding road to approval, including the following steps:

There is also an option for what is called "negotiated rulemaking." If this path is chosen by ATF, a meeting is held in the local area, with all interested parties invited, before the NPRM is published. ATF can use this method if it believes that it would streamline the process and resolve differences of opinion or data more effectively than the traditional procedure. However, I am not aware that this process has ever been used on a viticultural area petition.

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Working with an imperfect system

The establishment of AVAs has always been a somewhat controversial subject, with vintners differing —sometimes strongly —about where boundary lines belong, about how the approval of a proposed area may affect existing brand names in the industry, and even about how many AVAs the system can support. There are always voices in the crowd saying, "We have enough viticultural areas already. Any more would be confusing." Proponents of that view have been asserting it since the early 80's! Recently, AVA controversy achieved a new milestone: the California Wine Institute broke with its own tradition of impartiality by coming out against the proposed California Coast Viticultural Area.

There is plenty of room for controversy in the process. No human system is perfect, and the AVA approval process isn't even close. The petitioners and the regulators face several challenges:

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In my next column, I will explore the AVA creation process and its challenges in more depth, using past and current examples.