Battle lines are forming in Oregon over Senate Bill 111, originally hailed as a labeling law but fast becoming a flash point for wine growers, wine makers and out-of-state interests.
The controversy started in 2018, when the deceptive marketing practices of a California wine maker using Oregon grapes ultimately led to a push for truth in labeling. As reported by Capital Press, the legislation would call on the Oregon Liquor Control Commission to adopt new rules for enforcing wine labeling standards while also requiring wineries to pay a $25 per ton grape tax.
Copper Cane Wines & Provisions of California had been buying grapes from about 40 Oregon growers to make two brands of Pinot Noir and falsely labeling the wines with information that touted high-value growing regions called American Viticultural Areas. According to a study published in the Journal of Wine Economics by Omer Gokcekus and Clare M. Finnegan, when wine labels feature AVA designations in this way, it can make a big impact on price – from $1.43 to $14.13 a bottle.
The Oregon Winegrowers Association, with the help of the legislature, won its case against Copper Cane. The winemaker voluntarily surrendered nine labels to the Alcohol and Tobacco Tax and Trade Bureau. In addition, the Oregon Liquor Control Commission revoked the company's certification for doing business in the state.
Strengthening Oregon's Labeling Practices
Oregon already has some of the strictest labeling laws in the U.S. For a wine to carry an Oregon AVA reference on its label, at least 95 percent of its content must come from that region. In comparison, Federal law requires only 85 percent but demands that the wine be fermented in the state of origin. Both federal and state laws prohibit label language that is false or misleading.
Some of Oregon's wine growers point to the Copper Cane case as a rationale for toughening labeling laws even further. The proposed Senate Bill 111 would charge the OLCC with developing new regulations against importing and selling deceptively labeled wine, allow the OLCC to enter into agreements with agencies from other states, and increase fines for violations from $5,000 to $25,000.
A Divided Wine Industry
On the other hand, a coalition of wine makers and growers says the new legislation would hurt their business, chasing away potential buyers. NBC affiliate KOBI-TV News reported that wine growers fear loss of profits in the long run because of the stricter rules, by raising barriers for exporting grapes to other states.
One Oregon grower quoted by KOBI, Grestoni Vineyards owner Angelo Grestoni, alluded to the Copper Cane controversy, saying "One [rule] in particular that got me was that if you were an out of state winery, and you had any misrepresentation or any problems labeling your wine, going back three years, you could be subject to fines or revoking of your license."
Oregon Winegrowers Association Secretary John Pratt added, "There's a lot of people whose business plans depend on being able to sell their fruit to wherever, and there's more fruit grown here that can be made into wine here in Oregon."
There will be a lot of interested parties in Oregon and elsewhere watching how the Senate Bill 111 fight turns out in the next few weeks; a major share of profit from wine growing and production will depend on its outcome.
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