Overview of Conjunctive Labeling and Exclusive Wine Content Initiatives

September 13, 2018

View the WVWA’s PR statement on this issue.

Mission: The mission of the Willamette Valley Wineries Association (WVWA) is to promote, enhance and protect the prestige of Willamette Valley wines. Consistent with that mission the WVWA advocates for integrity in the content and labeling of wines that carry the Willamette Valley American Viticultural Area (AVA) designate. In support of those principles, the WVWA endorses the development of initiatives for Conjunctive Labeling and Exclusive Content of wines labeled with the Willamette Valley appellation of origin. The WVWA is pursuing a potential legislative foundation and Oregon Liquor Control Commission (OLCC) regulations for Conjunctive Labeling and Exclusive Wine Content. 

Strategic Objective: As the Willamette Valley wine industry grows and new participants enter the market there is a potential for the Willamette Valley’s high standards of quality to be compromised. The objective is to protect and perpetuate the prestige of Willamette Valley wines and the economic value and opportunities for vineyards and wineries of the Willamette Valley.

Rationale: The Willamette Valley’s Character and Distinctive Relational Assets
Over the past fifty years Willamette Valley winegrowers and winemakers have successfully made Oregon’s Willamette Valley synonymous with world class Pinot noir – one of a few places in the world where an appellation evokes a wine variety. The Willamette Valley’s unique climate, soils, geography, and exacting approaches to winegrowing and winemaking have created a world-renowned style of Pinot noir. 

Willamette Valley winegrowers and winemakers have collaborated to determine the rootstocks, clones, winegrowing methods, and winemaking techniques that best compliment Pinot noir. These numerous factors harmonize to produce a style and structure – a character – of Pinot noir that is unique to the Willamette Valley. As demonstrated at the Willamette Valley’s International Pinot noir Celebration and Oregon Pinot Camp small blending changes can have a dramatic impact on the character of Pinot noir.

Pinot noir is the earmark and heritage of the Willamette Valley wine industry, however other varieties will also enhance the future reputation of the Willamette Valley. Together the terroir, winemaking practices, and the character of Willamette Valley wines are “distinctive relational assets” that have created significant economic value for its wineries and vineyards. That value is reflected in premium pricing and superior sales growth rates of Willamette Valley wines. The economic value of these assets for Willamette Valley wineries and vineyards can be protected and enhanced by implementing Oregon statutes and OLCC regulations that memorialize wine labeling and content standards.

Genesis of Conjunctive Labeling and Exclusive Wine Content
In the Summer of 2017 the founders of the Willamette Valley AVA and its “nested” AVAs began discussing options for protecting and enhancing the character of Willamette Valley wines and the reputation of the Willamette Valley AVA. National and international wine companies were investigating, purchasing large amounts of fruit, and investing in the Willamette Valley. They were interested in leveraging the unique qualities and prestige of the Willamette Valley to expand their wine brands. In many cases these new entrants sought to complement and enhance the reputation of the Willamette Valley. However there is the potential that the Willamette Valley’s reputation could be exploited and degraded. Over the prior decade substantial effort was focused on distinguishing the nuances of the nested AVA’s located within the Willamette Valley.  The leadership of the Willamette Valley wine industry recognized that it was now time to focus on promoting and protecting the larger Willamette Valley AVA and the character of its wines. The initiatives on Conjunctive Labeling and Exclusive Wine Content had its genesis in those discussions.

Research Phase: Feedback from the Oregon Wine Industry
Fall of 2017 to Spring of 2018: Members of the WVWA solicited feedback on the general concepts of Conjunctive Labeling and Exclusive Wine Content from winemakers and winegrowers throughout the Willamette Valley. Groups surveyed included the Oregon Wine Industry Symposium, WVWA Annual Meeting, Chehalem Mountains Winegrowers Association, Dundee Hills Winegrowers Association, Eola-Amity Hill Winegrowers Association, McMinnville Foothills Winegrowers Association, Ribbon Ridge Winegrowers Association, Yamhill-Carlton Winegrowers Association, and Southern Willamette Valley Winegrowers Association.

May 2018: The WVWA established an Ad hoc Committee to develop detailed concepts and strategies for implementing Conjunctive Labeling and Exclusive Wine Content. Feedback from the Willamette Valley wine industry and advice from legal and legislative counsel was utilized to develop a framework of the concepts that could be used to initiate Oregon legislative statutes and/or OLCC regulations.

June to August of 2018: A draft legislative/regulatory framework for Conjunctive Labeling and Exclusive Wine Content was reviewed with winemakers and winegrowers throughout the Oregon wine industry. Forums for those reviews included Town Hall meetings in Newberg and Portland and meetings with representatives from the Oregon Winegrowers Association, Rogue Valley Winegrowers Association, Umpqua Valley Winegrowers Association, Columbia Valley Winegrowers Association, and Southern Oregon Winegrowers Association. The conceptual framework and strategy for implementing these initiatives was refined based on feedback from those meetings.

Conceptual Framework of Conjunctive Labeling
General Concept: Any wine labeled with an AVA appellation of origin that is located (“nested”) within the Willamette Valley AVA shall bear the designation “Willamette Valley” on the label in a type size not smaller than two millimeters on containers of more than 187 milliliters, or not smaller than one millimeter on containers of 187 milliliters or less.

Notes: The reference to “Willamette Valley” would not need to be adjacent to the nested AVA name used as the appellation of origin, or in the same size or font.  This statute would not require the use of any nested AVA.  It only applies if a winery chooses to use a nested AVA. A wine labeled with a nested-nested AVA such as the proposed “Laurelwood” AVA would not be required to carry the name of any other nested AVA within which it is nested. 

Compliance and Enforcement: This statute would not require new approval, reporting, or monitoring processes. No new enforcement processes or penalties shall be associated with this statute.  Wine labels remain subject to TTB COLA approval integrity audits. The WVWA would recommend that OLCC consider penalties as a “Category V” violation (the least punitive) in the event state-level enforcement occurs.

Conceptual Framework of Exclusive Wine Content
General Concept: Ensure that if the appellation of origin claimed or implied anywhere on a wine label is the Willamette Valley AVA, or an AVA nested within the Willamette Valley AVA, and the label uses the single grape variety name of “Pinot Noir” as the type designation (or other grape varieties to be determined by the Willamette Valley wine industry), or otherwise implies that the wine derives its volume solely from the identified grape variety, then the grapes used in the production of the wine must have been grown entirely in the Willamette Valley AVA and made exclusively with the single grape variety.

Notes: Under no circumstance should a winery be exposed to any enforcement process or penalty for an inadvertent one-time production mistake or for existing rogue vines of a variety other than the labeled variety that results in a bottled wine having less than 1.0% of its volume derived from grapes of another variety.

Compliance and Enforcement: The implementation of Exclusive Wine Content would not require new approval, reporting, or monitoring processes. Existing sourcing and wine cellar record keeping requirements shall be used to track fruit from vineyard to bottling. No new enforcement processes or penalties shall be associated with this initiative.  Wine labels remain subject to TTB and OLCC integrity audits. The WVWA would recommend that OLCC consider penalties as a “Category V” violation (the least punitive) in the event state-level enforcement occurs.

Process to Refine the Conceptual Framework: The Exclusive Wine Content initiative requires more discussion, collaboration, and development. The WVWA plans to manage a development phase for this initiative. In the development phase WVWA leadership will manage work groups made up of the Oregon wine industry to refine solutions for issues like the following:

An OLCC rulemaking would be initiated after work groups have identified solutions or alternatives for the various issues identified above.

WVWA Next Steps and Implementation Strategy 
Conjunctive Labeling: Legislative Initiative
Based on extensive communication and feedback there is strong support for an Oregon Legislative initiative that endorses Conjunctive Labeling of Willamette Valley wines. Thus the WVWA Board has authorized the first phase of developing an Oregon statute for Willamette Valley AVA Conjunctive Labeling. The first phase of development includes working with the Oregon Legislative Counsel to refine legislative language for Conjunctive Labeling and soliciting feedback and support for the potential statute with Oregon Legislative leadership. This phase of development is anticipated to take place in the Fall of 2018. The WVWA Board will then review the revised version of the legislative language. It will also review interim feedback from its membership and the Oregon wine industry. At that time, the Board will consider a vote to proceed with legislative implementation of Conjunctive Labeling.

Exclusive Wine Content: Additional Research and Development 
The WVWA Board has also authorized further research and development of the Exclusive Wine Content initiative. The WVWA plans to work with the Willamette Valley wine industry to identify other wine varieties that should be included in Exclusive Wine Content rules or statutes. The WVWA recognizes that the Exclusive Wine Content initiative has the potential to create economic hardship for Willamette Valley wineries that are currently using varieties other than that named or implied on the label (currently permitted up to 10%). There is also the potential for economic hardship for vineyards outside the Willamette Valley that are currently selling grapes to wineries that use those grapes in a wine labeled “ Willamette Valley” (currently permitted up to 5%). Therefore, the WVWA plans to work with wineries and winegrowers to identify limited grandfathering provisions or other methods to mitigate potential economic hardship.

In addition, there may need to be methods for the approval of exceptions due to specific circumstances or variance approval and use-up authority for a winery’s justified non-compliance. The WVWA plans to work with Willamette Valley wineries to identify the circumstances that will require exceptions and define the process for variance approval.

A key step in the development of the Exclusive Wine Content implementation strategy is for the WVWA to work with the OLCC to identify alternatives for codifying the initiative’s requirements. An OLCC rulemaking will likely be required to implement rules for the hardship mitigation, variances, and exceptions. The WVWA believes that many of those details can be resolved by working collaboratively with Oregon wine industry work groups in the Fall of 2018 and Spring of 2019 prior to the initiation of an OLCC rulemaking process. An Oregon Legislative initiative may be required to provide a statutory framework for Exclusive Wine Content, but detailed regulations will need to be codified via an OLCC rulemaking.

How do I learn more? 
Please watch this page for updated information detailing the legislative options and FAQs. 

How do I get involved? 
You are encouraged to submit comments and questions regarding these initiatives to townhall@willamettewines.com. The Willamette Valley Wineries Association will continue to try to broaden understanding of these Initiatives and work with industry members to improve them by meeting with grower or winery groups around the state.

Watch a recording of the July 30 presentation in full below.

View and download a PDF of the above statement.

 

Frequently Asked Questions

 

What is the objective of the Willamette Valley Wineries Association (WVWA) regarding its  wine labeling and content initiatives?
The mission of the WVWA is to promote, enhance and protect the prestige of Willamette Valley wines. Consistent with that mission, the WVWA advocates for integrity in the content and labeling of wines that carry the Willamette Valley American Viticultural Area (AVA) designate. Our objective is to protect and perpetuate the economic value and opportunities for vineyards and wineries in the Willamette Valley.

What are the initiatives that are being proposed by the WVWA?
There are three initiatives; two are often grouped under one heading. The first initiative is to require Conjunctive Labeling, i.e. include the Willamette Valley designation, of wines that are labeled with a wine region (appellation of origin) located within the Willamette Valley AVA. The second and third initiatives are Exclusive Fruit sourcing and Exclusive Variety Content – together they are often referred to as Exclusive Wine Content. The Exclusive Fruit Sourcing initiative deals with the source of fruit used in a wine. The Exclusive Wine Content initiative would require a single variety of grapes in a wine that is labeled accordingly.  

What is conjunctive labeling?
Conjunctive Labeling is the requirement to include a larger, more prominent appellation of origin, e.g. the Willamette Valley, on a wine label when using a smaller appellation to fulfill the TTB appellation-labeling requirement. 

Conjunctive Labeling would require that any wine labeled with an American Viticultural Area (AVA) that is located (“nested”) within the Willamette Valley AVA must include the words “Willamette Valley” somewhere on the front or back label.

What would not be required by the Conjunctive labeling requirements?
“Willamette Valley” would not need to be next to the nested AVA name or in the same size or font.  
This rule/law would not require AVAs outside the Willamette Valley to endorse Conjunctive Labeling.
A wine labeled with an AVA such as the proposed AVA “Laurelwood” would not need to also carry the name of the AVA within which it is nested, i.e. “Chehalem Mountains.”

What is the current status of the Conjunctive Labeling initiative?
The WVWA Board has authorized the first phase of developing an Oregon statute for Willamette Valley AVA Conjunctive Labeling. The first phase of development of this statute includes working with Oregon Legislative Counsel to refine legislative language for Conjunctive Labeling and soliciting feedback and support for the potential statute with Oregon Legislative leadership. This phase of development is anticipated to take a few months. In early December the WVWA Board will review a “close to final version” of the legislative language. It will also review interim feedback from its membership and the Oregon wine industry. At that time the Board will consider a vote to proceed with legislative implementation of Conjunctive Labeling.

What is Exclusive Wine Content?
Exclusive Wine Content is a concept that covers two initiatives. The first is Exclusive Fruit Sourcing and the second is Exclusive Variety Content.

What is Exclusive Fruit Sourcing?
Exclusive Fruit Sourcing is an effort to ensure that if the appellation of origin claimed or implied anywhere on a wine label is the Willamette Valley AVA or an AVA nested within the Willamette Valley AVA and the wine uses the single grape variety Pinot noir as the type designation (or other single varieties to be determined by the Willamette Valley wine industry), or otherwise implies that the wine derives its volume solely from that grape variety, then the grapes used in the production of the wine must be grown entirely in the Willamette Valley AVA. 

What is Exclusive Variety Content?
Exclusive Variety Content is an effort to ensure that if the appellation of origin claimed or implied anywhere on a wine label is the Willamette Valley AVA or an AVA nested within the Willamette Valley AVA and the wine uses the single grape variety Pinot noir as the type designation (or other single varieties to be determined by the Willamette Valley wine industry), or otherwise implies that the wine derives its volume solely from that grape variety, then the wine must have been made exclusively with the single grape variety.

Under no circumstance shall a winery be exposed to any enforcement process or penalty for circumstances that result in the bottled wine having less than one percent (1%) content from another variety caused by topping/blending mistakes, rogue vines and the like. Currently permitted additions of acid, sugar, yeast nutrients, tannins, etc. would not be affected.

What are the next steps with regard to the Exclusive Wine Content Initiatives? 
The next step on the Exclusive Wine Content Initiatives is to work with Willamette Valley wineries to determine which wine varieties in addition to Pinot noir should be included in the exclusivity requirement.

In addition communication and collaboration with the Oregon wine industry is necessary to develop methods for mitigating potential economic hardship for wineries in the Willamette Valley and winegrowers throughout Oregon.

 An OLCC rulemaking would ultimately be required to implement rules that define the wine varieties, potential hardship mitigation methods, permitted variances and required exceptions. The WVWA believes that many of those details can be resolved by working collaboratively with the industry over the next year prior to the initiation of a rulemaking process. An Oregon Legislative initiative may be required to provide a statutory foundation for Exclusive Wine Content, but the details will need to be defined in a collaborative process with the Oregon wine industry and the OLCC.

What happened to Chardonnay?
The WVWA Board realized, after community and stakeholder input, that other wine varieties need to be considered together with Chardonnay before finalizing the list of varieties that will need to comply with Exclusive Wine Content. Pinot noir is the hallmark and heritage of the Willamette Valley wine industry, however other varieties will also enhance the future reputation of the Willamette Valley. The WVWA will work with the wine community and look at all varieties as potential options. It is likely that Willamette Valley wineries will seek to include Chardonnay and other varieties in the Exclusive Wine Content Initiative.

What are the benefits of establishing Conjunctive Labeling and Exclusive Wine Content standards for Willamette Valley Pinot noir and other wine varieties?
For wine connoisseurs the Willamette Valley evokes identity with a distinctive style of world-renowned Pinot noir.  The “distinctive assets” associated with the Willamette Valley American Viticultural Area (AVA) include its unique climate and soils (i.e., the source of the fruit) and the exacting standards of winemaking (e.g., exclusive variety content) utilized in the Willamette Valley. As the Willamette Valley wine industry grows and new participants enter the market there is a potential for our high standards of quality to be compromised by the use of poor quality wine blends and wine additives (e.g., mega purple). 

Currently almost every Pinot noir wine produced in the Willamette Valley is produced entirely from grapes grown in the valley and those wines contain only that single variety.  Most wineries adhere to those same exacting standards for many other wine varieties. Labeling and content standards would make those practices mandatory with the following benefits:

What are the existing requirements for sourcing fruit labeled with the Willamette Valley as Appellation of Origin?
Oregon Liquor Control Commission (OLCC) regulations currently require that wines labeled with the Willamette Valley as appellation of origin be produced from grapes that are at least 95% sourced from the Willamette Valley AVA, and wines labeled as a single variety must be produced from grapes that are at least 90% that variety (note: the OLCC rule requires 90% for all but 18 varieties). U.S. Federal rules require only 75% of the named grape for most varieties.  European Union rules require only 85%. 

Is Exclusive Fruit Sourcing and Exclusive Variety Content required in other wine regions? 
Exclusive fruit sourcing is required in numerous wine appellations, e.g. Burgundy, Bordeaux, and Tuscany. Exclusive variety content is a rarely used concept in the wine world. In fact, as best we can determine, Rias Baixas Albarino and varietal-designated Alsatian wines are the only appellations, where 100% of the grapes used in a wine must be the named variety.

How could a winery label a wine that is not exclusively from vines of a single variety?
A winery would have several options.  It could use “Oregon” as the appellation of origin. Many wineries currently produce wines that utilized “Oregon” as the appellation of origin. An Oregon county or the state of Oregon could also be used. A fanciful name that list all the varieties with percentages used is an alternative; it could call the wine “Pinot noir 92% Meunier 8%;” or it could use a fanciful name and “Red Wine” as the type designation.

What about sparkling wines where Pinot noir and Chardonnay are often blended?
The same options are available.  But, very few sparkling wines are actually named “Pinot noir” or “Chardonnay”.  More typically they carry fanciful names like “Brut”, “Rosé”, “Blanc des Blancs”, etc.  The type designation is actually “Sparkling Wine,” usually in smaller letters. Sparkling wines that are named Pinot noir or other varieties that will be determined must comply with the exclusive standard for the base wine, but the use of other wine varieties for the dosage will be allowed. 

Why are these potential legislative actions important now? 
In the summer of 2017 the founders of the Willamette Valley AVA and its nested AVAs came together to brainstorm potential options for protecting the character of the Willamette Valley wine and the reputation of the Willamette Valley AVA. At that time, there was discussion of large national and international wine companies potentially investigating and purchasing large amounts of fruit, and investing in the Willamette Valley. They were all interested in leveraging the prestige of the Willamette Valley to expand their wine brands. In many cases these companies will complement and enhance the reputation of our region. However there is also the potential that the Willamette Valley reputation could be exploited and its reputation for integrity compromised. The group quickly recognized that it was time to move from building the reputation of individual nested AVAs to promoting and protecting the reputation of the Willamette Valley AVA’ and the character of its wines. The initiatives on Conjunctive Labeling and Exclusive Content had their genesis in that meeting.

Once approved how will these new requirements be communicated to the wine industry?
The Willamette Valley Winegrowers Association’s website has a webpage that has the latest versions of the Legislative Concepts, FAQs, and updates on the Legislative Process. Formal communication will be accomplished by the Willamette Valley Wineries Association.

 

Breakdown:

0:01 Scott Neal introduces himself, the presenters, and the board members present
2:40 Scott Neal introduces the Ad Hoc committee’s preliminary activities, the development of these legislative initiatives, and a potential schedule for moving forward
9:30 Ken Wright presents rationale for these statutes
24:10 David Adelsheim presents an overview of general proposed conjunctive labeling requirements 
30:32 David Adelsheim discusses conjunctive labeling compliance, monitoring, and enforcement
32:30 David Adelsheim presents an overview of proposed exclusive fruit sourcing requirements
36:35 David Adelsheim discusses grandfathering in exclusive fruit sourcing enforcement
37:48 David Adelsheim discusses exclusive fruit sourcing compliance, monitoring, and enforcement
41:50 Mike McNally opens the floor to Q&A

Special thanks to videographer Kathryn Lucchesi for filming this event.