Napa vintners hail court ruling

  • Los Angeles Times
  • Friday, August 6, 2004 9:00pm
  • Business

The California Supreme Court dealt a setback to maverick winemaker Fred Franzia on Thursday, much to the delight of his Napa Valley rivals.

The state court, saying it wanted to “provide stricter protection to consumers,” forbade all winemakers from using the “Napa” name or similar regional appellations on their labels unless 75 percent of the grapes in the bottle were actually grown in those places.

Although the ruling sounds sweeping, its immediate effect is quite limited: Only one company, Franzia’s Bronco Wine Co., is believed to have taken advantage of a federal loophole allowing a relative handful of vintners to use place-name designations even when most of the grapes were harvested elsewhere.

The decision could require Bronco, one of the nation’s largest producers of bulk wines, to change the names of three of its products: Napa Ridge, Napa Creek Winery and Rutherford Vintners – or to start using more grapes grown in Napa County.

Peter Brody, a lawyer for Bronco, said the company would continue to challenge the labeling requirement on constitutional grounds, including commercial free-speech rights. The court’s ruling will not be enforced until these other challenges play out.

More than 68 wineries, most of them from out of state, have supported Bronco’s position.

Thursday’s decision was applauded by Napa winemakers, who have been incensed at Franzia’s unabashed efforts to capitalize on the valley’s cachet while using cheaper grapes from other locales.

“Fred Franzia is more aggressive than anyone imagined,” said Tom Shelton, chief executive of Joseph Phelps Vineyards in St. Helena. “He has done so many things up here that are calculated to get under our skin.”

The battle stemmed from a 1986 federal law that prohibited winemakers from using geographic brand names unless three-quarters of the grapes were grown in that region. The law, however, included a provision allowing 36 brands that already used regional names to skirt the 75 percent requirement. Of those, it is believed that only the Bronco brands exploited the grandfather clause.

In 2000, at the behest of the Napa Valley Vintners Association, the state Legislature passed a law that effectively closed the loophole. At issue before the California Supreme Court was which statute applied: federal or state.

In overturning a 2002 appeals court decision, the justices came down squarely on the side of the state law. “California is recognized as a pre-eminent producer of wine, and the geographic source of its wines … forms a very significant basis upon which consumers worldwide evaluate expected quality when making a purchase,” Chief Justice Ronald M. George wrote for the court.

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