Published in Vineyard & Winery Management - May/June, 1996

Booming demand and short domestic supplies have recently sent winemakers and negotiants abroad in their search for good, competitively priced merlot and other varietals. Now that necessity has introduced vintners to the quality and economy of foreign bulk wines, varietals from Chile, France, Australia, and other parts of Europe and South America may find a permanent place in the American bulk market. From the consumer’s point of view, a foreign wine bottled in the U.S. may not appear at first glance to be an import. The label resembles its American counterparts. The brand name may be the same as other American wines they have purchased in the past. Only after closer scrutiny does the wine’s pedigree become apparent.

From the winery’s point of view however, bottling foreign bulk wine is significantly different from bottling American bulk wine. Vintners who plan to join this growing trend need to consider the regulatory requirements in advance. Without proper planning, they will find themselves scrambling — or badly delayed — when their ship comes in. In order to help you plan, this balance of this article discusses the five major "to-do" items you need to add to your bottling schedule for foreign wines. The biggest difference between a tank of California merlot and a tank of French or Chilean merlot is that the imported Merlot has already had its federal and state taxes paid. (Reminder for any small wineries who may consider importing bulk wine: your small producer credit does not apply to imported wine.) The fact that the wine is taxpaid dramatically affects its cellar treatment and its bottling.


Imported Bulk Wine in the Cellar

To-do item #1: Amend your bonded premises to set aside an area for taxpaid wine storage, or to obtain authority to alternate the tax status of individual tanks. Since it is taxpaid, imported bulk wine must be stored in an area that has been previously approved as taxpaid wine premises. This can either be a set of tanks permanently designated as taxpaid, or tanks that are authorized to alternate between in-bond and taxpaid status.

To-do item #2: Plan bottling quantities carefully, taking into consideration the limitations on cellar treatments for taxpaid wines. Federal regulations severely restrict what can be done to taxpaid wine. You may only do the following: simple filtration use sulfur compounds within regulatory limits, refrigeration, pasteurization. You may not do any of the following: anything that changes the basic character, class, or type of the wine, any cellar treatment which involves the addition of water, blend different tax classes of wine, use any of the materials authorized by Section 24. 246 for cellar treatment of wine in bond unless you get special advance permission to do so.

When planning bottling quantities you should also consider labeling requirements, which are discussed below.


Bottling Imported Bulk Wine

Taxpaid wine cannot be bottled on just any old bottling line — the bottling line must first be designated as taxpaid. But bottling lines cannot be alternated between taxpaid and in-bond status as simply as tanks. Before-hand, the winery must establish Taxpaid Wine Bottling House (TPWBH) premises.

To-do item #3: Establish a Taxpaid Wine Bottling House (TPWBH), or locate one in your area. The process of establishing a TPWBH involves a separate application to ATF; a separate registry number is assigned, and additional Special Occupational Tax is due. (Warning: In the Western Region all applications are currently taking a minimum twelve weeks to process. In other parts of the country similar workload delays may also apply. Please check with your local regional Office when making your plans!)

To-do item #4: Get together an other advance approvals needed. In addition to establishing a TPWBH, you may need to apply for a new basic permit. ATF usually expects the holder TPWBH to also hold either an importers or wholesalers basic permit, depending on whether your winery will be the importer of record not. If you do not already have these approvals, must apply in advance for them. Moreover, if your winery will be the importer of record, you may also need a state import license depending on the laws of your state. An importer’s license is required for California wineries which import.


Labeling Imported Bulk Wine

To-do item #5: Brush up on the requirements for labeling imported wine bottled in America, and adjust your plans if necessary to ensure the label reads well.

Vintage date and appellation: You may show a vintage date if you have an official certificate from the proper agency in the country of origin certifying that the wine qualifies for a vintage date according to their laws. If you have a vintage date you must show the appellation of origin (smaller than the country) on the same label as the wine designation. To qualify for an appellation, the wine must be 75% from the named area (political subdivision) or 85% from the named area (viticultural area) and must conform to the laws of the country of origin concerning production and designation. The requirements of the specific country will supercede ATF’s minimum percentages, if they are stricter. Chile, for example, will not allow a Chilean appellation on any wine unless it is derived 100% from grapes grown in Chile. As a separate requirement, country of origin must also be shown in any one of a number of acceptable formats, on any label.

Name and address: You must show "Imported by" and give the importer's name or trade name and address (city/state). You must also show the name and address of the bottler. If these operations are done by different entities or take place under permits at different addresses, two statements are needed. If your winery is both the importer and the bottler, you can say "Imported and bottled in the United States by." If your winery is the importer but not the bottler, the label can say "Imported by and bottled in the United States for" and list only your name and address.

Other mandatories: Other requirements are the same as for domestic wine. Don’t be shy about consulting with ATF or an expert compliance advisor about the technicalities — this terrain is unfamiliar to even to industry old-timers, so you’re in good company if you find it confusing. A little help from someone with experience or expertise will set you way ahead on your road to success with imported bulk varietals.