AVA CONSULTANTS: How will the AVA system be altered?
With the U.S. Government currently considering changes to how American Viticultural Areas are approved, some experts suggest eliminating the use of geographic brand names to avoid any further confusion.
September 4, 2007
SARA SCHORSKE (SS): I’ve come 180 degrees on my opinion. When I first heard it, I was upset because I’m working on four applications, all of which are affected. I worried immediately (about whether) during the freeze period, TTB would change its regulations dramatically because my clients and I have invested a lot of time.
My second thought was: maybe they (pending sub-AVAs) should be allowed to be processed under the old standards and start fresh with a new crop later.
But since I’ve heard that TTB’s concerns include sub-appellations and geographical brand names, I now believe it’s a good idea to suspend approvals while it rethinks the system. The AVA process is valuable. It’s part of worldwide competition that places have value. Otherwise why would a consumer buy a California wine or an Oregon wine instead of a potentially less expensive Chilean wine unless they valued the sources of those grapes?
We’ve become increasingly aware the last 10 years (that) there were problems with this system. In fact, the first AVA petition I worked on in 1983, the first thing I
AG: So has TTB been rubberstamping sub-AVAs?
SS: They don’t exactly rubberstamp. They ask questions and get strong evidence. … I sometimes wonder, “Why did they draw that line there?” (But) when I comment sometimes, it doesn’t change things.
It’s a complex issue to eliminate these problems that have been piling up. But a bigger view has to be taken. ... And you have to ask, what is the value of this to the world?
AG: What is the value of this issue to the world, and to the consumer?
ALEX HECKATHORN (AH): So that he or she still can use all the information on the label to make a choice of wine. … The consumer has to use these tools to decide. It’s got to be slightly more dependent on education than we’d like it to be because the inherent nature of our system makes it a little better than the French system. … So you may be able to find a more consistent product in your market.
SS: In an ideal world, the consumer should be able to make decisions on varietal, appellation, and brand without being confused about which is which. People who are concerned about geographical brand names worry that consumers will be confused and make wrong decisions.
AG: That’s why you want to see geographic names eliminated?
SS: Geographic indicators should be geographic and brands should be something else.
AG: Is it possible that TTB will dramatically change the regulations?
SS: It’s impossible to say. If they say they want to eliminate sub-appellations, that’s dramatic. When you think of the industry without sub-appellations, large companies can’t sell a large-production wine from a smaller appellation. They need to buy grapes from other appellations (to generate supply). A small winery on the other hand that lacks economies of scale, needs to charge more, so they need smaller appellations to distinguish their wines. But probably, TTB will have to back down on prohibiting sub-appellations. It’s actually unlivable.
AG: What will be the outcome then?
SS: I hope the outcome is: They say they want to make the appellation system more clear. But I think there should be some kind of speed bump put into the system, something that will make people think more about the big picture effect before they submit an application.
Another point: The Wine Institute worked in the ‘90s to grapple with this issue and they (members) couldn’t come to a consensus. … In our culture, self-interest is taken for granted. It’s not only a good thing to protect, people have every right. (But) if you step back and look at the world, there are some liabilities about self-interest in a bigger view of the world.
People have to be willing to compromise a little bit on self-interest and that is a good model for the entire world economically.
AG: Define “self-interest” in this case.
SS: Profit motive, the right to pursue security. Corporations basically amass wealth and increase profits. The whole issue is complicated … It’s very difficult to say to someone, stop doing it.
AG: Now you’re talking about capitalism.
SS: Capitalism is a wonderful system (but) certain aspects of it are pursued without consideration of the bigger picture. Capitalism is not perfect, (especially) with people who run it who are not being sensitive to the wider implications of self-interest decisions.
AG: So, what does this have to do with the wine industry?
SS: This may be a great opportunity for the wine industry to get the AVA system right and it might require it to compromise on its rigid pursuit of self-interest.
We have a lot of AVA names that are threatened by brand names. Maybe a solution would be to introduce a period that a brand would be allowed to phase out its geographical name (i.e. five years). Now the laws don’t define that. Maybe at some point all geographical names would fade out.
AG: You’ve been working with Calistoga Cellars for nine years, and I know you’ve advised them on this issue. Would phasing out of its name be a solution for Calistoga Cellars?