Champagne Label Fight Bubbles Over : Liquor: Dispute centers on 1936 law stipulating that vintners distinguish between wine fermented in bulk tanks or in bottles.

A furious fight over champagne labels is splitting domestic wine producers and subjecting federal regulators to intense lobbying by high-powered lawyers, a well-placed congressman and a former secretary of defense.

At issue is a 56-year-old regulation requiring that labels on American champagne clearly distinguish between bubbly fermented in the traditional, champenoise way--in the bottle--and less-expensive wine that is carbonated in bulk tanks before being poured into bottles.

U.S. champenoise producers, joined by importers of similarly made French champagne, have accused bulk processors of using misleading, forbidden labels and seeking to pass off bad champagne as good champagne in a grab for more of the lucrative sparkling wine market.

The traditionalists are pressing the Treasury Department to carry out a 1990 threat to enforce labeling restrictions against E&J; Gallo Winery and other bulk-process vintners.

But Modesto-based Gallo not only is resisting the Treasury crackdown, it is pushing for repeal of the label rule on the grounds that it is outmoded and discriminatory.

The dispute, confined until now to free-swinging, even effervescent legal briefs by prestigious lawyers, is getting political as it comes to a head.

The Treasury Department is expected to decide whether to enforce, drop or modify the regulation soon after a Feb. 19 meeting between Gallo representatives and Deputy Treasury Secretary John E. Robson.

The meeting was set up and will be attended by a key congressman recruited by a Gallo lobbyist: Rep. Edward R. Roybal (D-Los Angeles), chairman of a House Appropriations subcommittee that has jurisdiction over the Treasury Department’s budget.

Trying to trump Roybal’s clout, champenoise makers have enlisted another Californian, former Defense Secretary Caspar W. Weinberger, to plead their case in a personal note to an old friend and Robson’s boss, Treasury Secretary Nicholas F. Brady.

The champenoise producers have singled out Gallo in their complaints. They note, for example, that Gallo’s Andre brand, priced at about $4 a bottle, carries a label that lacks two required qualifiers surrounding the words champagne , California and bulk process.

The two words appear below in much smaller type instead of the same size, as required by a 1936 regulation revised in 1958. Critics say that consumers thus are led to believe that they are getting champagne as good as that made by the champenoise method, which sells for $13 to $30 a bottle, takes months more to make and has traditionally been considered superior to the bulk-process drink.

Domestic champenoise makers merely have to identify their champagne’s origin, such as “American” or “California.”

“Gutting these labels would result in a severe threat to 115 small makers of champenoise in 20 states to the benefit of industry giants like Gallo,” Robert Neuman, a lobbyist for the champenoise producers and importers, charged Wednesday.

But Gallo is pressing to repeal the label restrictions on the grounds that they have been overtaken by modern technology and consumer understanding, thus unfairly forcing bulk processors to use “demeaning and degrading labeling terms.”

“In today’s marketplace, the vast majority of Americans ask for and buy ‘champagne,’ unconcerned about production technique or country of origin,” Gallo spokesman Daniel J. Solomon said in a statement. “Today, charmat (bulk-process) champagne accounts for 75% of U.S. production and well over half of U.S. consumption.”

Gallo contends that champenoise producers are using the same huge stainless steel tanks and bottle-handling machines used by bulk processors for much of their champagne production. Thus, label distinctions are increasingly meaningless, they say.

But champenoise producers respond that they still employ the 300-year-old French method of conducting second-stage fermentation in individual bottles for as long as six years. This, they say, creates special bubbles and taste never achieved in all-bulk-tank production.

Eugene T. Rossides, a former assistant secretary of the treasury who works for a prominent law firm here, puts it this way in a 37-page brief on behalf of champenoise producers and importers:

“Bulk process wines will bubble, but not foam, when poured into a glass. Traditional method wines will both bubble and foam. Although the visual impact of bubbles is a part of how sparkling wines are perceived, the real difference is in how the two wines are felt in the mouth. Bulk process wines are perceived in the mouth as having a popping feel, like soda pop or carbonated water. Traditional method wines have a creamy, foaming feeling.”

In a 53-page retort, lawyers on behalf of Gallo and three other wineries scoff that there is uncertainty in the claim that longer aging produces champagne with “more desirable retention properties and a more stable foam.”

They assert that consumer practices influence foaming much more--practices such as “pouring versus splashing the champagne into the glass, the smoothness versus the roughness of the glass, the presence or absence of foreign particles on the glass, the shape of the glass and the temperature at which the champagne is served.”

In an interview, Roybal said that in arranging the meeting between Gallo and Robson, he was merely helping fellow Californians present their case, “not going to bat for them.” However, he indicated that he was unaware of the deep divisions between U.S. champagne producers on the issue.

“The dispute is between French champagne and our domestic champagne,” he said. “I don’t care for champagne either way, but I don’t think French champagne is much better than ours. I was told that a majority of California winemakers want to present the facts to Robson because his underlings have not made it clear to him what the problem is.”

Twenty-seven of the champenoise producers who are vigorously defending current labeling restrictions are from California.

Gary B. Heck, who heads Guerneville-based Korbel, wrote to Robson: “These abuses are severely damaging my business and deceiving consumers of California champagne as to the true nature of the products they are purchasing.”

The Truth Is in the Bottle

Champagne produced by traditional methods requires more time and expense. Bulk wine processors are being accused of using misleading labels to pass off inexpensive champagne as a higher priced product.

TWO METHODS FOR PRODUCING SPARKILING WINES

Traditional method:

1. Still wines are fermented in a cask

2. A “cuvee,” or blend of wines, is then placed in an individual bottle, which in a sense becomes the factory. The wine is stacked in racks and aged.

3. After aging, bottles are placed in riddling racks, neck down, so yeast may settle near the caps.

4. Bottle necks are frozen and the caps removed so that pressure blows out and disgorges the sediment.

5. Small amounts of wine and sugar are added to determine dryness.

Bulk method:

1. Still wine is fermented in a cask.

2. Sugar and yeast are added for a second fermentation, but wine remains in a cask rather than individual bottles.

3. Wine is filtered from the tank to get rid of the sediment and bottled.

Differences:

* Wine produced in bulk method bubbles when uncorked.

* Traditional champagne will both bubble and foam.

* Traditional champagne has a creamy or foamy texture in the mouth. Bulk process wines often give off a popping sensation.

Sources: Wine producers, Champagne News and Information Bureau