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Geographic labeling of wine in question.

California Supreme Court justices considered arguments May 24 from a bulk wine company that federal and not state law prevails in a lawsuit over when the word "Napa" can be used on wine labels. Richard Mendelson, the lawyer for the Napa Valley Vintners Association contends the public is "deceived" when labels bearing the name "Napa" are made from grapes grown in the less-than-super-premium Central San Joaquin Valley region of California.

But Peter M. Brody, the attorney for Bronco Wine, contends that California law is preempted by federal regulations promulgated under the Federal Alcohol Administration Act (FAAA). "The state's law must give way" in a preemption battle, Brody said.

FAAA imposed various requirements on wine labels and included a grandfather clause for holders of a Certificate of Label Approval, which exempts them from prohibitions on the use of appellations of origin in brand names for wines. Regulations promulgated by the federal Bureau of Alcohol, Tobacco and Firearms require that for wine to hail from a specific appellation--such as Napa Valley, Sonoma Valley, Martha's Vineyard, or any of the other 120 specific geographic viticultural areas--75 percent of the volume must come from that specific location.

Some serious money is at stake in the labeling battle, which the wine world is watching. The Wine institute estimates the retail value of the state's shipments to the United States last year at $14.3 billion, a 2.3 percent increase over 2002. Premium California table wine sales $7 and above for a 750 ml bottle account for 30 percent of the volume and 62 percent of winery revenues. Everyday wines priced up to $7 have a 70 percent share of the volume sold and 38 percent of winery revenues, the Wine Institute reported April 1.

Justices expressed skepticism that federal law trumps California's law, which Mendelson described as a consumer law. Oregon's varietal content law was upheld in 1977, Mendelson said, noting that states are permitted to have supplemental systems that are "concurrent, cooperative [and] complementary" to federal law. Justices have 90 days from oral argument to issue a decision, although the matter likely will then head to the U.S. Supreme Court.
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Publication:Food & Drink Weekly
Geographic Code:1USA
Date:May 31, 2004
Previous Article:Supreme Court to determine constitutionality of interstate shipments of wine.
Next Article:Coalition urges voluntary country-of-origin labeling.

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