January 3, 2012
Director, Regulations and Rulings
Division, Alcohol and Tobacco Tax and
Trade Bureau, P.O. Box 14412,
Washington, DC 20044–4412
Re: WineAmerica Comments on TTB Notice No. 122
Dear Director Isenberg:
Thank you for the opportunity to comment on Notice No. 122, Proposed Revision to Vintage Date Requirements. This rulemaking would allow wines labeled with a country appellation of origin, including American appellation wines, to disclose their vintage. WineAmerica has long supported this change to TTB regulations and urges the implementation of this proposed rulemaking as soon as possible.
This rulemaking is critical to our membership for at least two reasons:
First, the prohibition against use of vintage dates on country appellation wines unnecessarily harms domestic wineries. American appellation wines are produced in every state, but because they are prohibited from bearing basic, truthful and important vintage information, are at a considerable market disadvantage to other wines.
Second, vintage information helps clarify the “identity and quality” of wines for consumers. 27 U.S.C. § 205(e)(2). While American appellation wines, like all vintage wines, can vary widely year-to-year, current regulations make it difficult for consumers to distinguish which vintages of American appellation wine they prefer.
If adopted, Notice No. 122 would benefit thousands of American businesses, allowing wineries in every state to truthfully disclose information about their products that consumers find useful.
TTB has long prohibited wines with a country appellation of origin from including a vintage date. See 27 C.F.R. § 4.27. Since at least 2006, however, TTB has recognized that market forces have made the historical reasons for this limitation obsolete. See Change to Vintage Date Requirements, 71 Fed. Reg. 25748, 25751 (May 2, 2006) (responding to comments suggesting that vintage dating was primarily about location and harvest conditions, TTB noted that “vintage date information may be used by consumers in various ways.”) Notice No. 122 takes full account of changing consumer perceptions by allowing country appellation wines to bear a vintage date. WineAmerica applauds TTB for this notice of proposed rulemaking, and strongly urges its adoption.
Over the past 30 years the number of domestic wineries has grown astronomically, from fewer than 600 basic permitted wineries in 1975, to more than 7,500 located in every corner of the United States today. This dynamic growth is a remarkable success story that continues to unfold. Wineries are at the heart of a new model of rural economic development that relies on agri-tourism and values the authenticity of local products that reflect local culture. These businesses have pumped fresh investment and profit into nearly every corner of the country. And in every state, for a wide range of reasons, wineries make American appellation wines.
With our still fragile economic recovery, TTB’s decision to publish Notice No. 122, reducing an unnecessary regulatory burden that could restrict the continued growth of nascent and successful family businesses that promote good jobs in areas of the country that desperately need them, is sensible regulatory reform.
Truthfully Disclosing Vintage
American and other country appellation wines should be permitted to utilize vintage dates. As TTB notes in Notice No. 122, consumers often “use the vintage date to ensure that they are not purchasing a wine that is too old or too young for their preferences.” Proposed Revision to Vintage Date Requirements, 76 Fed. Reg. 68373, 68374 (Nov. 4, 2011). This allowance for disclosure of “information as to the identity and quality of the products” is fundamental to the Federal Alcohol Administration Act’s (“FAA Act”) labeling standards. 27 U.S.C. § 205(e). Wine labels should always be permitted to bear such truthful information that is helpful to consumers.
In 2006, commenters took issue with the overly narrow logic of 27 C.F.R. § 4.27 by noting that “[w]ith the exception of the luxury-priced wine market where a particular vintage is often celebrated for its uniqueness, nearly all other wine consumers, both domestically and abroad, have specific style and quality expectations that are consistent from purchase to purchase.” 71 Fed. Reg. at 25750. This consumer expectation continues to remain true, and justifies TTB’s decision to broaden vintage dating regulations through Notice No. 122. More broadly, vintage dates promote product transparency and lot identification, shelf management tools that protect producers and allow consumers to more clearly identify wines they like.
Prohibiting vintage dating for country appellation wines can also carry a false connation. It can give the misimpression of product uniformity from year-to-year—that a wine is in a “house” style produced from several vintages—when that is not in fact the case. It can likewise lead consumers to believe a product is a “jug” wine when the truth might be otherwise. Similarly, the restriction can be misleading in the way it creates consumer confusion. If a particular varietal wine is ordinarily a vintage product, consumers may not understand why the same varietal wine, produced by the same winery, because of vintage conditions and a need for out-of-state fruit, is suddenly non-vintage. Simply put, the prohibition on vintage dating can unfairly mark a wine as inferior or unfamiliar and cause consumer deception prohibited by the FAA Act. See id.
Wineries should not be penalized for choosing to use the American appellation. So long as the vintage information provided is truthful and not misleading, country appellation wines should be permitted to bear a vintage date.
Practical Impact of Policy Change
The Public COLA Registry lists more than 10,000 wines that have secured Certificates of Label Approval in the last decade that use an American appellation on their label. In addition, wineries throughout the U.S. regularly seek Certificates of Label Exemption in order to vintage date American appellation wines sold exclusively in intrastate commerce. Wineries should not be forced to choose between interstate sales and vintage dating, but that is exactly what TTB regulations currently require.
Notice No. 122 would finally treat American appellation wines as the equal of multi-state, state and county appellation wines. By establishing a more market driven definition for vintage labeling, TTB will make consumer outreach and education far easier. Wineries will no longer have to give long-winded explanations for why their American appellation wines are non-vintage, or why their vintage American appellation wines can only be sold in intrastate commerce. The wines will simply be permitted to stand or fall on their own merits.
The change contemplated by Notice No. 122 has long been a priority for WineAmerica and we welcome TTB’s publication of the notice of proposed rulemaking. This rulemaking will benefit wineries throughout the U.S., and the many thousands of wines that utilize the American appellation.