A Ferment Among Calif. Vintners

By Steve Vogel
Washington Post Staff Writer
Thursday, March 5, 2009

The name Calistoga has held a special place in American wine circles for more than three decades, ever since a chardonnay from an upstart vineyard in the small wine-growing region of California's Napa Valley defeated the titans of French wine.

The results of the legendary 1976 blind tasting -- the "Judgment of Paris," as it came to be known -- shook the wine world and helped transform the image of California vineyards from purveyors of jug wines to producers of world-class wine. The story was portrayed last year in the film "Bottle Shock," a somewhat fanciful version of the David-vs.-Goliath account of how wine from Chateau Montelena in the northwest corner of Napa was chosen by a panel of French oenophiles over a selection of France's finest white Burgundies.

As the American wine industry began its march to becoming the $1 billion-a-year export industry it is today, the federal government established a system in 1978 to recognize the country's distinct grape-growing areas. The appellation system creating American Viticultural Areas, or AVAs, is popular in the wine industry, which uses it as a marketing tool.

Now the tiny federal agency that oversees the program has triggered an uproar within the industry because it wants to make it tougher to win an AVA designation -- a move highly unpopular with many vineyards. The Alcohol and Tobacco Tax and Trade Bureau, an obscure agency of the Treasury Department, thinks that the changes are needed to protect existing brands that use a region's name in their labels even if their grapes do not come from that region. But opponents say that by protecting those brands, the government would be misleading consumers as to the origins of the grapes.

This issue is at the heart of a controversy surrounding the proposed creation of a Calistoga AVA.

Over the past 30 years, at the request of wineries and other petitioners, more than 190 AVAs have been established across the country, including Catoctin in Maryland, the Escondido Valley in Texas and, most recently, Snipes Mountain in Washington state. California has more than 90 appellations, and Napa alone has 14, each boasting distinct grapes refined by weather and soil conditions.

But Calistoga -- despite its status as "perhaps the most historically viticulturally significant area of Napa Valley," according to the Napa Valley Vintners trade association -- has not been recognized with its own AVA.

"It should be a slam-dunk," said Chateau Montelena master winemaker James P. "Bo" Barrett, who has worked at the vineyard since his father, a San Francisco lawyer, began producing wine in 1972.

The designation is tied up in a bureaucratic wrangle pitting Barrett and the bulk of Calistoga vintners against one winery, Calistoga Cellars, whose grapes come from elsewhere in Napa. AVA rules require that 85 percent of the grapes used in a particular bottling come from the named area.

"The only thing Calistoga in Calistoga Cellars is the name on their labels," Barrett complained.

Barrett and other Calistoga vintners were in Washington last week hoping to drum up support for their cause, turning to allies on Capitol Hill. These include Rep. Mike Thompson (D-Calif.), who represents Napa, and Rep. George Radanovich (R-Calif.), also a veteran of the wine industry. The men are co-chairmen of the Congressional Wine Caucus.

They wrote a letter to Treasury Secretary Timothy F. Geithner last week complaining that the proposed rule changes "could do lasting harm to the growing American wine industry."

The TTB argues that AVAs can be misused by wineries to limit competition. "We believe that preserving the integrity of the AVA program mandates clarifying the standards for AVAs to foster greater scrutiny on the establishment of new AVAs," agency administrator John J. Manfreda said in a written response to questions.

The TTB has proposed that Calistoga Cellars be granted a "grandfather" exemption that would allow it to continue to use the Calistoga name but with a disclaimer on the label to make it clear the wine does not meet the AVA standards.

Manfreda said such exemptions should be granted "only in the rarest of cases" and only with disclaimers providing adequate assurance that consumers would not be misled as to the origin of the grapes.

Roger Louer, chairman of Calistoga Cellars, has his own support on Capitol Hill: a former classmate from Iowa State University, Sen. Tom Harkin (D-Iowa), chairman of the Senate Committee on Agriculture, Nutrition and Forestry. Harkin sent a letter last year to the Treasury Department asking that it respect the rights of businesses such as Calistoga Cellars. Five other members of Congress have sent similar letters.

The TTB declined to offer the grandfather clause to a second company with Calistoga in its name but not in its grapes: Calistoga Estate, established by Marvin Stirman, former owner of Calvert Liquors in Washington.

Why "they would include one and not the other makes no sense to me," Stirman said. The TTB decided that the winery did not qualify for an exemption because the Calistoga Estate name had not been submitted to the agency before the proposal for the Calistoga AVA was announced.

Like Calistoga Cellars, Stirman's wines are made from Napa grapes, but few or none are from Calistoga. Stirman said Calistoga grapes are too expensive for a mid-priced wine.

The Napa vintners complain that the TTB should not have approved two wine labels bearing Calistoga as part of their brand name in the first place and should not now change the rules.

The result is a standoff that the Napa trade group says means that "legitimate growers and vintners in Calistoga cannot legally put Calistoga on their wine labels."

The TTB said decisions about Calistoga and the proposed revamping of the AVA system are on hold until the matter is reviewed by the Obama administration.

Said Stirman, "I think they decided it was a hot potato."

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