Correction for use of sub AVAs on a wine back label
Posted on 2015-06-09 by Ann Reynolds

In a recent blog post from April 28th I shared about a wine label compliance discussion I had with Rob Mondavi. In that blog I posted (incorrectly!) that listing two sub AVAs of Napa Valley on a wine’s back label would not be considered in compliance per TTB regulations.  My statement was based solely on the guiding TTB regulation for use of an AVA on a wine label. 27 CFR 4.25 e 3 (iii)

Many of you who have interacted with the TTB over the years specific to wine labels are aware that they are at times not black and white with the interpretation of their regulations. (A common source of frustration for our industry!)

So I did a little bit more digging directly with Marsha Heath from the TTB’s Industry Relations office in Washington DC. I explained my wine label AVA scenario to her, that Napa Valley would be listed on the wine’s front label and Atlas Peak and Howell Mountain would be listed in the descriptive text on the back label. Would this be acceptable to them?

Ms. Heath’s response was yes it would as long as those two sub AVAs of Napa Valley were:

1. Shown on the true back label for the wine

2. Listed in the “romance” language on the back label & not prominently otherwise

I asked for some sort of TTB regulation I could refer clients and students to as to why this AVA use would be acceptable to them. Her source: 27 CFR 4.38 (f)

This wine label regulation has the broad name of “additional information”. Sort of a catch all for the range of other statements or items that can show up on labels that are not specifically addressed in existing TTB label regulations. 

As my AVA use on a wine back label scenario is very similar I had been hoping for something at least along the lines of the industry ruling from 1985 related to listing multiple varietals on a wine back label. It is “black and white” regulation references like this that I like to be able to direct clients and students to to help them understand what they can & can’t do on their wine labels.

Marsha Heath was very thorough and helpful during our call though, which I’ve come to appreciate & commonly expect with my frequent interactions with TTB staff.

Still have questions about your wine label design?  

Sign up for one of my Compliance Check In calls 





Decoding a wine label decoding infographic
Posted on 2015-05-28 by Ann Reynolds

This interesting infographic posted by Vinepair titled “How to decode an American wine label” came across my radar recently.

If you’re a regular reader of my blogs you know wine labels are a “near and dear” topic for me.  (So much that I even wrote a book about them.)

First of all let me give appreciative credit to Vinepair for putting this together. Wine labels have a lot going on behind them so I give kudos to Vinepair for the creation of this helpful graphic. Their infographic does explain the basic details about wine label items. There are deeper levels going on here that I’d like to further clarify. Those levels are specific to TTB requirements and so in turn to the winery that made and or bottled the wine So to further decode the decoding on this infographic here they are item by item:

Brand/Producer: What appears on a wine label as the “brand” is a required TTB item on any wine label. It may be the name of the winery, though as Vinepair points out it is also often another brand that the winery has created to sell a separate line of their wines through. A brand is something that consumers also become familiar with- as in developing a brand loyalty sort of following.

State/County/AVA/Variety: They get the basics of this correct here as far as the TTB percentage requirements for listing a state or county name (75%) or AVA name (85%) on your wine label. These percentage requirements are specific to the grape sources though, whereas use of a variety name on a wine label is always a 75% minimum. So for example a wine blend that contains 77% Cabernet Sauvignon and 23% Merlot and 100% of it comes from grapes grown within the Napa Valley AVA qualifies to list Cabernet Sauvignon and Napa Valley on its labels. 

Vintage:  The statement here that this is the year the grapes were grown and harvested is accurate, but digging deeper the use of it on a wine label backs into TTB minimum percentage requirements & into what “geographic area” is listed on the label. The TTB requires an appellation of origin (state/county/AVA name) to be listed on any wine label that lists a vintage. If the appellation that is listed is either a county name or a state name then the minimum percentage requirements to qualify for listing a vintage is 85%. If the appellation listed on the label is an AVA name, then the minimum percentage requirement to list a vintage narrows to 95%. 

Name & address:  Here Vinepair accurately states, “depending on the level of involvement in all stages of the wine making process the text preceding the producers address will vary.” Yes- but what exactly does all that mean? Their label here lists “Grown, produced and bottled” in the name and address statement. What does that tell you about the wine? Grown and produced have two separate definitions and percentage requirements. To use the term “grown” the winery must either own all the land that 100% of the grapes for this wine came from or have a long term lease on that land. (at least 3 years) To use the term “produced” in this statement means that the winery where this wine was bottled must have either fully fermented or at least completed fermentation on a minimum of 75% of the blend in that bottle. I emphasize bottled here because it is fairly common for wines to be bottled at a different site than where they were fermented. (The term “produced” translates to “fermented” in the TTB’s eyes)

Alcohol content: An alcohol content is a required item on any wine label. The TTB has allowable tolerance ranges for what is listed on a label, to what the actual alcohol content of the wine is. On the label here with a 15.1% alcohol listed the actual content of this wine could be as low as 14.1% up to as high at 16.1% and would still be within TTB compliance. 

To sum up here is what a consumer looking at the wine label in this infographic would know about the wine in the bottle:

  • At least 85% of the grapes used to make this wine came from within the Napa Valley AVA
  • At least 75% of the grapes in the blend are Cabernet Sauvignon 
  • At least 95% of the grapes were harvested in the 2010 vintage
  • 100% of the grapes were grown on land owned or long term leased by the winery
  • At least 75% of this wine blend was fully fermented or finished fermentation at the winery site in Yountville, CA

Questions on any of this related to the design of your wine labels?  

Sign up for one of my Compliance Check in Calls





Winery Compliance Class in Napa: June 10th
Posted on 2015-05-26 by Ann Reynolds

 Just like there are seasons of growth and activity in the vineyards, the same applies for activity levels related to day to day winery compliance tasks. Right now, late Spring is generally a quieter time for wineries, which makes it a perfect opportunity to do some “spring cleaning” related to their compliance!

A first step to get you started with that “spring cleaning”? Sign up for a winery compliance class that could save your winery potentially thousands of dollars & lots of sleepless nights!!

The class is “How to keep your winery Audit safe” and is being offered on Wednesday, June 10th from 8:30 til 11:30 through the Napa-Sonoma Small Business Development Center (SBDC).

Go HERE for full details.

It will be offered at the SBDC office on the Napa Valley College campus.

The class will focus specifically on key issues related to TTB (Alcohol & Tobacco Tax & Trade Bureau) and Napa County Planning Audits. These are items that come up most frequently in the course of on site audits by both of these regulating agencies. Topics such as required records and reporting, excise tax payments, and how to determine production levels will be explained and reviewed so attendees can then determine whether their winery has any potential issues that need to be addressed.

Winery staff attending the class are highly encouraged to bring the following items:

  • Full previous years TTB 5120.17 (“702″) reports
  • Most recent TTB excise tax report
  • Examples of required records: bill of lading for cased wine
  • Current Napa county Use Permit 

This class will go a long way to help wineries fully connect the dots as to how the records and reports they are required to be maintaining and filing either have potential audit holes in them, leaving them vulnerable as well as specific steps they can take now to address them.

Here is a link to get signed up:    Winery Compliance Class

 





CA wineries: Time to renew your ABC licenses
Posted on 2015-05-05 by Ann Reynolds

Here in California if you are in business as a winery, which is known as a “Winegrower” with our Alcoholic Beverage Control agency by now you would have more than likely received a mailing with your type 02 license renewals. The CA ABC gives numbers to all the different types of licenses they issue, and for those in the winery game they hold the type 02, or winegrower license.

First of all, I’ve always gotten a kick out of that term, “winegrower”. I always thought wine was made, and grapes were grown. However the license name was derived by the CA ABC folks once upon a time they are still rather old school with their renewal process. All type 02 licenses, which is called the Winegrower come up for renewal by June 30th of each year. These renewals are sent out, and must be returned via snail mail to the CA ABC headquarters in Sacramento. 

So a head’s up to all you California wineries- if you don’t receive this renewal mailing from the CA ABC by the end of May- give their Sacramento office a call 916-263-6882. You’ll want to provide them with your ABC license # as well. In case you can’t easily track down what that number is- here’s a link to look it up on their handy license query lookup

The CA ABC states that it isn’t their fault if for some reason their renewal mailings don’t make it successfully to your mailbox, and if they don’t receive your renewal mailing back post marked by June 30th they will tack on a ranging rate of late fee, which depends on what your license fee is. I also suggest sending your renewal back to their office in some form that you can track confirmation that they received it.

One other point worth mentioning here is that if your wine business is the “alternating proprietor” type you will hold a second type 02 license, called a duplicate. This will list whatever your businesses address is, which is different from your other type 02 license that lists the winery’s physical address. This second, or “duplicate” 02 license is also up for renewal by June 30th of every year- so make sure that you receive that renewal mailing from the CA ABC office as well. Here is where to contact them again if you don’t receive it by the end of May.  (916) 263-6882.





Talking wine label compliance with Rob Mondavi
Posted on 2015-04-28 by Ann Reynolds

Winery compliance as a profession is a rare and generally unknown one. Most people I meet have no idea what the term “winery compliance” means. One of the easiest ways to explain what it is that I do is to point to a wine label and state “everything that you see there is regulated by the federal, and potentially state government and wineries are required to maintain records to back them up”. Their faces will light up and they’ll nod their heads with an “I get it” sort of look.

There is a lot going on behind the scenes of a wine label, so as part of my business I have a lot of conversations with clients around the topic. These conversations are most often in the label design stage of planning for a bottling. We talk about the specific details of their wine’s blend breakdown (Vintage, varietal, appellation, etc) and based on what those are then tells us what it will or won’t qualify to list on its labels.

I had one of these conversations recently with client, colleague and friend Rob Mondavi, President of winemaking for Michael Mondavi Family Estate who had a few questions around the use of two common wine label items, AVAs and vineyard names. He would tell me the percents of a wine blend and then ask whether an AVA or vineyard name could be listed on either the wine’s front or back label, or both.

For the first topic of listing an AVA, his question was if a wine blend was sourced from two of Napa Valley’s sub AVAs could they both be listed on the back label? The answer: no. YES! The federal requirements (TTB) for use of an AVA on a wine label require that a minimum of 85% of the grapes used to make the wine blend must come from that AVA. So then the math would never work to list more than one AVA on any wine label. False! See my updated blog which explains why the TTB may allow this. I will point out the “exception” to this is in the case of listing a sub AVA and its parent AVA on either the front or a back label. For example, for a wine with 85% or more of its grapes coming from the Atlas Peak AVA, it could list “Atlas Peak, Napa Valley” on either label. (Note: It would also be required to list both per CA state law – see earlier blog post on this topic)

The next topic we discussed was the use of vineyard names on a wine label. Rob wanted to know about listing more than one vineyard site on a back label. This would be acceptable to the TTB. They would require the vineyard source information to be listed in either of the following formats. Either the vineyard sources would be listed by name in descending order OR each vineyard would be listed by name along with it’s actual percent in the blend. 

This is different from listing a vineyard name on a wine’s front label. In that situation, use of a vineyard name becomes what is known as a “vineyard designate” and then per TTB requirements the wine blend must contain at least 95% of its grapes from that specific vineyard site. 

These are fun and satisfying conversations for me to have with my clients. They exercise my wine label compliance muscles, and at the same time provide bite size pieces of learning for my clients. (The best way to learn winery compliance) Rob was doing his best to stump me during this conversation- and as he put it, “I’d really like to believe that you’re incorrect, but unfortunately realize that more than likely you’re not”. In other words the legal ins and outs of wine label regulations often don’t make sense to the folks being regulated by them, but they’ll play by their rules to maintain that “truth in advertising”.

If you want to know the full story on all federally regulated wine label items, you may be interested in my book, The Inside Story of a Wine Label.

 





Chiropractic adjustments for your winery compliance
Posted on 2015-04-22 by Ann Reynolds

In my weekly email newsletter sent out yesterday I talked to my readers about the benefits I’ve received over the years from getting chiropractic adjustments and how I recently recognized a parallel between them and the common “pains” I see in the world of winery compliance.

The parallel being that some simple adjustments can be made in how wineries are handling their required TTB compliance which will result in the current “pains” they are experiencing going away.

When we decide to have chiropractic treatments, it is because our bodies either have been injured or have become out of alignment from other sources and the adjustments put them back into proper alignment so they can function effectively as they are supposed to, and free from pain. However, once our bodies are put back into proper alignment then it is up to us to maintain that, otherwise the pain will resurface.

What do some adjustments look like in the world of TTB winery compliance?

1. Knowing exactly what required winemaking records they need to be maintaining and the specifics of setting them up to meet TTB requirements. (State & local here too)

2. Having a plan for exactly how your required reports are managed. This includes a set schedule for filing them & assigning their responsibility to the best person(s) for the job.

3. Having a big picture “blueprint” which encompasses all of their winery site’s local, state & federal licenses and how each of those are connected to the others as far as their required records or reports.  The management of this “blueprint” also needs to be assigned to a best fit staff member or members. By best fit here has everything to do with their aptitude and attitude towards the rather maze like qualities of winery compliance. Too often I see these tasks being assigned to the wrong staff members, which is a cause of the wineries “pains”.

Where can a winery compliance adjustment be obtained?

Training!   I’m hosting my next live training course on Tuesday, May 12th in Placerville, CA.

For full info follow the link below.

Winery Compliance: On the road





Winery Compliance Class: May 12th in Placerville
Posted on 2015-04-14 by Ann Reynolds

In last week’s blog post I wrote about how winery compliance is a conundrum of a task for the vast majority of winery staff responsible for managing it. What is the main factor behind this? In my opinion it comes from the following two sources:

  • (1) They are given little to no training specific to it
  • (2) The wrong staff person (or persons) are managing it

I was in the fist group back in my early days at Sterling Vineyards in the late 90’s, when I first began the compliance leg of my wine industry career. Essentially I felt like I was stumbling around in the dark as I attempted to make sense of the 6 figures of wine gallons I was tracking on and off site and how their details (vintage, varietal, appellation, etc) translated into what the TTB required to meet their regulations and keep in their good graces.

Fast forward from there to 2006 when in large part as a result of my less than ideal winery compliance learning experiences I began teaching the topic at Napa Valley College. Since then I’ve continued to offer compliance training courses through other venues, in both face to face and via online style.

I’ve decided to expand these training opportunities to a wider area and will host my next in person training in the Sierra Foothills region of California – where there are well over 200 wineries currently.

The course is being offered on Tuesday, May 12th from 9 am til 2 pm at the Cary House Hotel in Placerville. 

Full course info & sign up details are here:  

Winery Compliance Training: On the Road

This course is for you if you too have felt like you’re stumbling around in the dark as far as understanding what your winery is supposed to be doing to keep up with TTB regs and you’d really like some piece of mind that comes from a training like this.

Topics covered include:

What specific records you need to be keeping on your wines & what they need to look like

What reports you need to be sending to the TTB and how to fill them out to avoid any red flags

Time savers for your TTB filings: required reports and label approvals

TTB & CA BOE excise taxes: Is your winery filing and paying them at the correct rates





Wineries: How is your compliance confidence?
Posted on 2015-04-08 by Ann Reynolds

Winery compliance is  (more often than not) a conundrum. A conundrum is defined as “a difficult and intricate problem”. I think most winery staff who have had the responsibility of trying to figure out their winery’s TTB 702 report filings, excise taxes or label approvals would agree with me. So if you’re reading this and nodding in agreement, know that you’re definitely not alone. We’ve all been there. (Or still are!) I was there myself once upon a time!

Add to this “conundrum” nature of winery compliance the fact that it is just one item on the long list of overall responsibilities held by the winery staff  who manage it.

What does this mean for most wineries? They combine this “difficult and intricate problem”  with not a lot of time to learn how to solve it and that adds up to improper record keeping, incorrectly filed reports, claiming TTB tax credits they don’t qualify for and wine labels that are out of compliance. These are the most common scenarios I see and hear about firsthand from winery staff in all parts of the country. So TTB compliance remains on some level a constant conundrum that hovers in the background for winery owners and staff, leaving them feeling ill at ease and often vulnerable to being audited.

I think at the end of the day the winery staff that are responsible for managing any required TTB filings would like to have a sense of confidence around it. Confidence that you know you’re filing your numbers correctly, paying taxes at the rate you qualify for and that your wine labels would pass TTB review. (just to name a few!)

There are some fairly simple ways this can be achieved. A brief checklist to begin with, which will start a winery down the path of assessing the key problem areas associated with TTB audits, and whether or not their winery is at issue for them. From there they can begin to fill any holes they may have in the different areas of their TTB compliance.

I’ve created a brief questionnaire wineries can use to start this process which can be accessed here:

5 Step Winery Compliance Self Check





AVAs on Wine Labels: Continued
Posted on 2015-03-31 by Ann Reynolds

Last week I wrote about the conjunctive labeling laws on the books here in California – and specifically the requirement of placing the parent AVA, Napa Valley next to any sub-AVA of it that is listed on any labels placed on a bottle of wine.

I realized this topic ties directly in with a TTB requirement related to how wineries are tracking those loads of sub Napa Valley AVA grapes. This topic is an issue I have seen often at wineries over the years, and is related to their weigh tags, or more formally known as weighmaster certificates.

Weighmaster certificates are a legally regulated document which track the purchase/sale of a load of wine grapes. (in this example) They are required to have a specific set of text & fields on them, however an appellation field is not one of them.  Here is where the TTB rub comes in.

The TTB sees a weigh tag documenting a load of grapes as a “source document” or in other words think of them as birth certificates for your wines. The details that you fill in on a weigh tag tie directly in with what you eventually will or will not qualify to list on the wine label for the wine those grapes become a part of.

Here is an example of what I’ve seen commonly happening on weigh tags. A load of grapes from a sub AVA of Napa Valley comes into a winery. The winery does have an appellation field on their weighmaster certificate template. (Score one point for their compliance!)  However when they write up the weigh tag for that load of grapes they fill in the appellation field with “Napa Valley” when they need to list the sub AVA instead. This will mean that come label design time for the wine those grapes are made into it would NOT qualify to list the sub AVA on its label – because it was not documented on the “source document” or weigh tag.

If wineries would first make sure to include an appellation field on their weighmaster certificate template and then next ALWAYS be as narrow as possible in the AVA they list on all their weigh tags this will provide them the widest options come label design time & cover them to any TTB scrutiny.





Give Napa Valley credit or lose your license
Posted on 2015-03-25 by Ann Reynolds

I recently heard from 2 clients telling me they were contacted regarding their use of a sub AVA of Napa Valley on their TTB approved wine label. What they were specifically being contacted about was that their labels did NOT also list Napa Valley next to that sub AVA.

This scenario is one example of what are known as conjunctive wine labeling laws here in
California. In the case of Napa Valley it is sourced from California Business & Professions code #25240 , which has existed since 1990. What it placed into law is the requirement that any wine label which lists one of Napa Valley’s sub AVAs (which we now have 16!)  must also list “Napa Valley” next to it………..Anywhere that sub AVA appears on the label by the way folks!

What might happen to your winery if you don’t do this you ask? You could be required to pull all of that bottled wine out of warehouses, retailers, etc and re-label it correctly. Or your winery could have its CA ABC license suspended or revoked.

There are currently 4 conjunctive wine labeling laws on the books in California. Besides our Napa Valley scenario here the other three are Lodi, Paso Robles & Sonoma County.

Winery staff that are involved in the compliance side of wine label design & obtaining TTB label approval need to be the watchdogs on behalf of their winery or wine cellar for this California requirement. The TTB is not going to flag your label approval submission for not meeting this state of California conjunctive labeling requirement! 

Through the wonderful technological tools now available for doing TTB COLA searches- our CA ABC offices or anyone else interested in keeping a “conjunctive labeling” eye on TTB approved wine labels can easily run searches to spot those that are out of compliance.

This is another great example of what I refer to as the “connect the dots” big picture that wineries need to have in relation to successfully managing their ongoing compliance. By “connect the dots” I mean how one item of your winery compliance, in this instance an individual wine label and its TTB label approval is then connected to meeting requirements of CA ABC law.

Who has this “connect the dots” view at your winery?





1 2 3 4 12