Two Senators Backing Gallo Got $112,000

In a growing federal dispute over champagne labels, Sens. Bob Dole (R-Kan.) and John Seymour (R-Calif.) have teamed up to help E & J Gallo Winery after receiving a total of $112,000 in political contributions from the Gallo family over the last three years, records show.

Dole, the Senate Republican leader, and Seymour extensively argued Gallo’s case in a letter to a top Treasury Department official several days before representatives from the Modesto-based winery met with the official Wednesday.

The meeting was arranged at Gallo’s request by Rep. Edward R. Roybal (D-Los Angeles), chairman of a House panel in charge of the Treasury Department’s budget. Roybal received $4,000 in campaign gifts from Gallo family members last year, according to Federal Election Commission records.

All parties said the contributions and assistance were not connected. But the fight over a 56-year-old labeling regulation began foaming ever more furiously. Gallo leveled new charges against rival champagne makers and importers as the opposition intensified its lobbying of federal regulators.

Gallo is seeking to drop the term “bulk process” from its champagne labels, a move fought by French and California champagne makers who use the traditional champenoise method of fermenting wine in individual bottles instead of in huge steel tanks.

Champenoise makers and importers, faced with slumping sales, charge that Gallo and other bulk-processors want to deceive consumers into believing that their relatively cheap, assertedly inferior sparkling wine is as good as champenoise champagne. They insist on retaining a 1936 regulation that requires “bulk process” bubbly to be identified.

Gallo, which dominates the U.S. champagne market, claims that the two production methods are increasingly similar and that the term “bulk process” is unfairly “demeaning and degrading.” Gallo and others want to use the term “Charmat method,” named after Frenchman Eugene Charmat, who devised it.

The dispute will be decided by Deputy Treasury Secretary John E. Robson, who met with Gallo officials Wednesday and will meet next week with the champenoise camp, including the National Assn. of Beverage Importers and Gary B. Heck, president of Korbel winery of Guerneville, Calif.

In their Feb. 7 letter to Robson, Dole and Seymour said that almost all U.S. consumers believe “champagne is champagne, regardless of the production,” and that “the minute fraction of champagne consumers who care about the champenoise production know exactly what to look for” without needing labels that specifically identify bulk-process brands.

The senators said they would suggest adoption of “Charmat method” or “Charmat technique” as permitted terms.

Over the last three years, 10 members of the Gallo family donated a total of $12,000 to Dole’s reelection committee and $85,000 to Campaign America, a political action committee that Dole created largely to give money to other candidates. The contributors included brothers Ernest and Julio Gallo, who founded the winery, and their sons, spouses and a son-in-law.

Last September and December, the same family members contributed $15,482 to Seymour, an appointee who is running for election to his Senate seat this year.

Roybal, chairman of a House Appropriations subcommittee, received a total of $4,000 from four Gallos last October.

Roybal and spokesmen for Dole, Seymour and Gallo denied any linkage between money and help.

But Gallo spokesman Dan Solomon charged that two champenoise proponents, former assistant Treasury Secretary Eugene T. Rossides and public relations agent Robert Neuman, “have approached the National Baptist Convention in an effort to organize a boycott of our products.”

Their aim, he suggested, was to link the champagne flap with protests that religious groups have made against cheap, high-alcohol wine sold by Gallo and others.

Dave Gencarelli, general counsel of the National Assn. of Beverage Importers, laughed off the allegation, saying there is no champenoise conspiracy with Baptists.

“That’s not the kind of group we hang our hat with,” he said.