November 10, 2014
Appellations of origin are the place names that describe where the grapes that make up a given wine were grown. There are rules controlling the statement of appellation on the label, all of which are aimed at making sure that the label of the product accurately reflects what is inside the bottle. Most of the appellation labeling rules are in the Code of Federal Regulations at 27 CFR Part 4, but state law must also be considered, and can sometimes be more limiting than the federal rules.
Appellations are required on wines if the label also includes a varietal designation or a vintage year (27 CFR 4.34(b)). The chart below lists some of the basics on appellations for wines made from California grapes.
|Appellation on Label||What is in the Bottle?|
|California||75% of the fruit must be from California and the wine must be finished within California or an adjoining state. (27 CFR 4.25)|
|A County in California||75% of the fruit has to be from the county and the wine has to be finished in California. (27 CFR 4.25)|
|Two or Three Counties in California||All of the fruit has to come from the listed counties, the percentage of fruit from each county has to be listed on the label, and the wine has to be finished in California. No more than three counties can be listed. (27 CFR 4.25)|
|An American Viticultural Area (AVA) in California||AVAs are specific geographic areas approved by the TTB. A list of all of the AVAs in the country is available here. 85% of the fruit has to come from the AVA and the wine has to be finished in California. (27 CFR 4.25)|
Special California Requirements
|Appellation on Label||Special California Rule|
|“California” or any geographical subdivision of California (including a county or two or three counties)||100% of fruit must come from California. (Cal. Code Regs., tit. 17, § 17015). This rule is more specific than the federal rules, and means that any wine with a California appellation of any kind must be made from 100% California fruit.|
|“Sonoma County”||Labels MUST say this if also labeled with an AVA entirely within Sonoma County. (Cal. Bus. & Prof. Code 25246)|
|“Napa Valley”||Labels MUST say this if also labeled with an AVA entirely within Napa County. (Cal. Bus. & Prof. Code 25240)|
|“Lodi”||Labels MUST say this if also labeled with an AVA entirely within the Lodi AVA (Cal. Bus. & Prof. Code 25245)|
|“Paso Robles”||Labels MUST say this if also labeled with an AVA entirely within the Paso Robles AVA (Cal. Bus. & Prof. Code 25244)|
|“Napa”, “Sonoma” and any AVA in Napa County||The rules for using “Napa,” “Sonoma,” and any AVAs in Napa are especially strict. Those terms cannot appear on the labels unless the wine in the bottle qualifies for use of the term under the federal labeling regulations.(Cal. Bus. & Prof. Code 25241, 25242 and 27 CFR 4.25)|
|Counties of Sonoma, Napa, Mendocino, Lake, Santa Clara, Santa Cruz, Alameda, San Benito, Solano, San Luis Obispo, Contra Costa, Monterey or Marin||Any written representation (e.g., labels, advertising, company letterhead, etc.) that a wine is produced entirely from grapes grown in these counties must be true. (Cal. Bus. & Prof. Code 25237)|
|“California Central Coast Counties Dry Wine”||This designation can only appear on a label if all of the grapes are from the counties of Sonoma, Napa, Mendocino, Lake, Santa Clara, Santa Cruz, Alameda, San Benito, Solano San Luis Obispo, Contra Costa, Monterey or Marin. (Cal. Bus. & Prof. Code 25236)|
Related Labeling Considerations
The appellation rules noted above are intertwined with other federal labeling regulations, which may also come into play. For example, if a label includes a varietal and an appellation, 75% of the grapes used in the wine must be of the stated grape type and all of those grapes must come from the stated appellation. (27 CFR 4.23) If the label includes a vintage year and an appellation, 85% of the grapes in the wine must be from the stated vintage year – and if the appellation is an AVA, the percentage requirement rises to 95%. (27 CFR 4.27)
Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·
September 04, 2014
Traditionally a customer wanting a bottle of alcohol in California would go to their local package or grocery store to get it or, if they were lucky enough to be in wine country, directly to a winery. In recent years, with consumers actively experimenting and looking for more variety, and with the boom in online shopping generally, consumers have a lot more options to find that elusive boutique wine, craft beer or small batch spirit brand that they have heard about and have been looking for. All of this means that consumers are turning more and more to the internet to find the alcohol that they want to serve at home. A quick Google search of internet alcohol sales in California yields more than 10 million results.
SPIRITS: Only a California Type 21 off-sale general licensee can sell a bottle of distilled spirits direct to consumer (DTC). Although a distiller can host a customer at the distillery to taste the products that are made there, a distiller cannot sell a bottle of spirits to a customer to take home.
BEER: There is a bit more leeway for beer with brewers being able to offer tastings and sell beer to customers. The CA law was revised just this year to make it very clear that a brewer can only sell its own beer to customers, and not beer made by other brewers, unless it gets a retail license. As a matter of policy, the ABC will allow a beer manufacturer to also make an online sale of its beer to a consumer. An on-premises retailer like a restaurant or a bar can also sell beer to customers to take home, and by the same ABC policy can sell online. Off-sale retailers like grocery stores can sell beer to consumers online.
WINE: As with other alcohol, wine can be sold DTC by off-sale retailers. An on-sale retailer can also sell wine online, under ABC policy allowing online sales by retailers. A winery can also sell wine DTC, both at the winery and online, including through wine clubs. The state also offers two opportunities for the online retail sale of wine without a traditional brick and mortar store. The first of these is with a 17/20 wholesale and retail combination, or a 9/17/20 import/wholesale/retail combination. In both cases, wine can be sold online to customers and indeed can only be sold by direct mail, telephone or the internet from a location which is not open to the public. The license combination is often located right at the warehouse, enabling the licensee to easily pick and pack and ship out customer orders. The 17/20 combination allows the holder to sell directly to retailers as well as consumers and, with the addition of the type 9, the licensee can bring in wine from out-of-state and get it all the way to a consumer without passing through any other licensee’s hands. The second option is more recent and consists of a type 85 license, which gives the licensee the ability to sell wine at retail without the added wholesale or import rights. The chief distinction between the 85 and the 17/20 combination is that the 17/20 licensees have a wholesale license so they are required to make sales to retailers in addition to consumers, whereas the type 85 licensee sells only to consumers.
OUT-OF-STATE SELLERS: If you are a seller of alcohol located out-of-state, only wine can be sold DTC to California consumers and only under certain circumstances. A licensed winery in another U.S. state can get a direct shipper’s permit to sell DTC. For a licensed retailer in another state, the laws are murkier. California has a “reciprocity” statute which only permits out-of-state retail sales from states which allow a California retailer to ship to that state’s consumers. Currently, only thirteen states and the District of Columbia allow such sales. However, the concept of “reciprocity” was criticized by the Supreme Court in its 2005 decision in Granholm v. Heald, 544 U.S. 460, with specific reference to this California law. The law itself has not been challenged and thus the limitation remains on the books.
If you are interested in learning more about direct shipping laws in California or elsewhere, contact one of the attorneys at Strike & Techel.
Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·
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