Calistoga launches a name game

Calistoga, Calif.

IT was like a scene out of “High Noon.” The mid-September grand opening party at Calistoga Cellars in downtown Calistoga was well underway when two dozen grape growers, the dirt from harvest still clinging to their jeans, gathered outside the tasting room. They dropped a bucket of grapes by the front door with a sign reading “Real Calistoga Grapes for Sale,” crossed their arms and waited.

Calistoga Cellars owner Roger Louer didn’t disappoint them. He stormed out, threatening to call the police if the growers didn’t pick up their grapes and leave. Chateau Montelena owner and winemaker Bo Barrett, chest to chin with the shorter Louer, glowered down from under a floppy brimmed hat. “You don’t think you’re misleading consumers by making your wines with fruit from outside of the region?” Barrett asked. Louer shot back that he’s promoting Calistoga with his wines.

Four years ago, Barrett petitioned the U.S. government to make Calistoga an American Viticultural Area (AVA). Louer derailed that effort by filing an objection to protect his brand name, “Calistoga Cellars,” as well as his right to use non-Calistoga fruit to make those wines. Since then, neither side has blinked.

Now, the small-town shouting match is a nationwide industry crisis. Frustrated by no settlement, U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) shelved the Calistoga AVA application in June, along with 21 other pending applications, and launched a controversial top-to-bottom review of AVA rules.

The outcome could fundamentally alter the rules American winemakers have lived by for decades. If it changes the rules, the government will likely make it harder for consumers to know the geographic origin of a wine by permitting more brand names that suggest the wine is made with grapes grown in a particular region when that is not the case. Such a ruling would undermine efforts to establish geography as a defining characteristic of wine, a principle at the heart of the U.S. AVA system.

And ironically, the stalemate has come over an AVA application for a region that many observers agree has more reason to be so defined than almost any other part of Napa Valley. What constitutes an AVA? The rules mandate little more than that the region be shown to be separate from neighboring AVAs and have a history of being a distinctive viticultural region.

The application for the Calistoga AVA states that the region has been known as Calistoga since the town was founded by Sam Brannan in 1857. The first grapes were planted in 1862, and Calistoga was listed in a viticultural census as long ago as 1893. Alone among Napa Valley subregions, Calistoga is dominated by a single soil type -- volcanic. (Elsewhere in the valley, a mix of more than half of the known soil types in the world run in seams that cross several individual AVAs.) The proposed Calistoga AVA also has a distinctive climate. In wet years, there can be 60 inches of rain in Calistoga, whereas the rest of the valley rarely gets more than 40 inches. During drought, the reverse can be true. And the 50-degree day-to-night summertime change in temperature is the most dramatic diurnal shift in the Napa Valley.

The American AVA rules passed in 1978 and revised in 1986 were designed to make place names a basic definition of American wine. Along with France (where the term terroir, indicating environmental factors such as soil and climate, originated) and the rest of the wine-making world, most of the American wine industry thinks that the place where particular grapes are grown is reflected in the character of the wine made from those grapes.

Evolving wine regions

The American system of AVAs, however, is very different from the French system of Appellation d’Origine Controlee (AOC). Both identify a particular wine with the place where the grapes are grown and the wine is vinified. But the French AOC system is intended to control wine quality. Individual AOCs often reflect hundreds of years of winemaking tradition. The AOC rules codify some of those traditions, often dictating what grapes can be grown and how the wines are vinified as well as the nomenclature, bottle shape and alcohol content.

The U.S. AVA system establishes no quality requirements but requires that 85% of the grapes used in a AVA-designated wine be grown in that AVA. The rules assume that wine regions, even in places as seemingly well-established as Napa Valley , are still evolving. The number of AVAs is growing rapidly. Five years ago, there were 147 approved AVAs. Now there are 188.

The federal government’s plan, according to TTB spokesman Arthur Resnick, is to revamp the rules defining AVAs in order to avoid future conflicts between brand names and place names, potentially expanding the list of allowable brand names that use geographic indicators that do not represent the wine in the bottle. There would also be an effort to “tighten up” the AVA definition. It could take years to conclude such a sweeping rule-making process, during which most proposals for new AVA establishment would be frozen.

“This is not healthy for the wine industry,” says Robert Koch, chief executive officer of the Wine Institute, the trade association representing the California wine industry. “We don’t take positions on individual AVA applications. We have members on both sides of these issues. But there is broad agreement among our 1,100 members that the existing AVA rules work. This freeze doesn’t make sense.”

Fifty-five members of the Congressional Wine Caucus led by Rep. Mike Thompson (D-St. Helena) have signed a letter to the Treasury Department “strongly opposing” the suspension of the AVA approval process. Two weeks ago, Koch says, he made a formal presentation to Treasury expressing the Wine Institute’s objection to any changes in the AVA rules.

So far, nothing’s changed. “It is our intention to go forward with a proposed rule-making as soon as possible,” TTB’s Resnick says.

The freeze on AVA approvals affects California wine regions beyond Calistoga. Although the government has shelved only applications that propose new AVAs within existing AVAs and applications for which existing brand names pose a conflict, that includes nearly all proposed new AVAs, Koch says. Of the 15 such applications received by the TTB this year, 11 represent an effort by wineries in the Paso Robles area to reorganize that single 600,000-acre AVA into 11 smaller, more geographically significant AVAs.

Paso Robles’ AVA was set in the 1980s when there were only three wineries there, says Robert Haas, a Tablas Creek Winery partner. “We wanted to divide it into smaller, more meaningful regions. Then the whole Calistoga thing blew up on us. It isn’t cricket for the TTB to do this to us. We played the game according to their rules and now they want to change the rules.”

In 1986, when the American AVAs rules were revised, there were plenty of conflicts between proposed AVA names and existing brand names. Those brand names were allowed to continue to exist, even if their grapes were sourced outside the AVA reflected in their brand name. Often, the AVA would have the word “district” added to differentiate it from the brand names.

For instance, Stags Leap and Spring Mountain became Stags Leap District and Spring Mountain District. Stag’s Leap Wine Cellars and Spring Mountain Vineyard continued to be used as brand names.

State law is tougher when it comes to Napa Valley. California requires wines designated “Napa Valley” or with any AVA within Napa’s borders to be made with 75% Napa Valley fruit. That law was upheld by the California Supreme Court in 2004 in a challenge by Fred Franzia, the vintner behind Charles Shaw wines.

The AVA rules do not address how brand names created after the 1986 rule revision will be handled. While the TTB has the authority to make that determination itself, it prefers to follow codified procedures.

When Louer established his brand in 1997, he says, “I assumed Calistoga Cellars would be grandfathered just as those wineries were in 1986.”

The Calistoga growers, supported by the Napa Valley Vintners, have been steadfast in their opposition to offering a compromise with Louer and the other winery using the Calistoga name, Calistoga Estate, established after the AVA petition was filed. “If it’s not Calistoga wine in the bottle, it’s purposely deceptive,” Barrett says. “They are hurting the reputation of the region.”

The Napa Valley Vintners have been equally adamant about not changing the AVA name to Calistoga District. “Any party then could use ‘Calistoga’ as part of a trademark for wine regardless of the geographic origin of the wine,” says Rex Stultz, head of government affairs for the trade group.

What puzzles Koch is why TTB is launching this rule-making process at all. “There is no movement within the industry to support these changes,” Koch says. “I don’t know where the impetus is coming from for this. We’re trying to work with these folks [at TTB]. And talking usually works in situations like this.”

corie.brown@latimes.com