200% tariffs on European wines would be extremely dangerous for California wineries

In 2019, I wrote a blog explaining why proposed 100% tariffs on European wines would create a cascade of negative impacts on American wineries, and shared the letter I submitted to the Office of the US Trade Representative in opposition to the plan. In the end, the tariffs didn't come to pass, either then or the following year when the threat was renewed. Well, even more substantial tariffs against European wines are now again on the table, and some of the hot takes in response have been badly off base. I responded to one of these hot takes on Threads, from journalist Christina Binkley, who has written on the business of culture and style for outlets like the Wall Street Journal, Town & Country, and Vogue:

To her credit, Christina posted a response owning up to the mistake after reading the responses she received. And I'm not posting her initial piece to pile on. But I've heard a variation of her take from lots of people outside the world of wine and wanted to dive a little deeper into why I am convinced that tripling the price on European wines would have negative spillover effects onto those of us who make wine here in America.

I'll start with the direct impacts. These tariffs post an extinction-level threat to importers of European wines. A thread by importer Lyle Fass, proprietor of Fass Selections, laid out the math. Tariffs are taxes due from the importer to the US government at the port of entry. Importers would be on the hook for double what they've paid for any wine that they order, including wine already paid for and in transit:

 

Let’s talk about the financial catastrophe these 200% wine tariffs will create. Not in theory but in reality.

In my case, the $350,000 worth of wine I have coming in September? I’ve already paid for it. That money is gone. Now I have to pay a 200% tariff just to bring it into the country. That means coughing up another $700,000 overnight.

That’s just me. Now imagine what this does to the entire industry.

Fine, I hear you asking, but how is this bad for a California winery like Tablas Creek? I see the danger in three areas:

• We are dependent upon wholesalers, all of whom sell both imports and domestic wines. We sell about half our production through a network of state-licensed wholesalers. This distribution system is mandated by law. A producer like us cannot sell directly to restaurants and retailers in other states, and our ability to sell directly to consumers, while growing, is still restricted. So, our success is dependent upon the health of this distribution network. None of the 50+ distributors that we work with represents exclusively domestic wines; all have a diverse portfolio including wines that would be impacted by the proposed tariffs. Many get the majority of their business from European wines. A significant number are also importers. For those importer/distributors, the proposed tariffs amount to a death sentence. For the distributors with a mix of imported and domestic wineries, sales will fall, perhaps dramatically, limiting their ability to buy our wines. To save money, they will lay off salespeople, limiting their ability to sell our wines. Could American wines fill in the gap? Not for years. The production of American wines is currently about 300 million cases. Consumption of wine in the United States is about 375 million cases. It takes roughly five years for new plantings to produce grapes, be fermented and bottled, and eventually reach the market. By the time that American wines could make up the difference, the damage to wholesalers would be done.
• Our exports, which have been a growing piece of our mix, would likely be subject to retaliatory tariffs. We've already seen this play out in Canada, whose provinces have responded to the on-again-off-again threats to impose across-the-board 25% tariffs by pulling all American products off the shelves of the province-wide monopolies that are the only legal outlets for wine in the country. We have already received cancellations of confirmed orders to Quebec and Ontario. If European wine is targeted in a new round of tariffs, it's very likely that American wine will be on the list of reciprocal targets. While export markets aren't a huge piece of our business, we've been investing in them in recent years and have been rewarded with significant growth. Last year we spent a little over $42,000 to grow our sales in our export markets, including visits I've written about on this blog to Asia, to Canada, and to Europe, and saw our export sales grow from $78,000 in 2023 to $175,000 in 2024. We expected additional growth in our export sales in 2025. Those prospects are looking shaky.
• The uncertainty is already inhibiting investment in an American wine ecosystem that is under record strain. I have heard from several distributors that because of the uncertain climate around tariffs this year that they're holding off on hiring new staff, bringing in new inventory, or taking on new suppliers. That impact is hard to quantify, but I know it's cost us at least one opportunity with a high profile distributor and it's reduced the coverage of the distributor teams we do work with as many are trying to make do with fewer salespeople to cover their existing network of accounts. And the distributor network is already under dangerous levels of strain. The country's two largest distributors, Southern Glazers and RNDC, have both executed multiple waves of layoffs in recent months. Constellation Brands, the country's fourth-largest wine company, is reported to be exiting the wine sphere entirely. If a major producer or distributor should declare bankruptcy the cascade of impacts on their suppliers and customers would almost certainly cause other failures.

Would tariffs hurt European producers? Absolutely. But because of the legally-mandated channels that alcohol must be distributed through, Americans would be hurt more. The US Wine Trade Alliance has calculated that for every $1.00 in damage tariffs would inflict on the EU, they cause $4.52 in losses to American businesses. 

That $4.52 in losses doesn't include the losses in export sales by the imposition of reciprocal tariffs, or the damage to the international reputation of American wine, which could be both sharp and lasting. Canada has been California wine's largest export partner for decades, at a total value of over $1 billion last year. The recent tariff dispute has already created a boycott of American wines (and other products) that will likely render the market less welcoming even after any trade issues have been resolved. It's taken decades to build up the international reputation for American wine. That goodwill can disappear fast, as evidenced by these signs now posted in the American wine sections of Ontario's LCBO stores:

But would there be a larger piece of the pie here for California wineries? Not much of one, I don't think. As I mentioned above, the additional capacity here is finite. It's also not clear that American wines would be the first choices for replacing the lost business from European wines. At the low end, the likely substitute for European wines would be wines from other New World countries like Chile, Argentina, and Australia, all of which do better in the under-$15 segment than American wineries. At the high end, the places that wines come from are inseparable from the wines' identities. An Oregon Pinot Noir isn't going to smoothly replace a Grand Cru Burgundy, nor is a California Nebbiolo going to replace a Barolo. Classic wines aren't commodities produced by formula from specific grapes, that could be grown anywhere. My guess, based on what we saw last time, is that at the high end, there would be a period where restaurants and retailers scavenge inventory from warehouses around the country, and then sales would drop sharply as buyers wait and hope the tariffs are rescinded. We might see a few new placement opportunities but those benefits would be overwhelmed by the disruption in our distribution network.

I also think that the long-term impacts would be negative for the broader world of restaurants and hospitality. The restaurant business is never easy. It's famously low-margin, with half of all restaurants closing within 5 years. Wine offers restaurants an area where they do make good margins, and while I have my complaints about that model, I still want restaurants to be successful. Can a neighborhood Italian joint replace its inexpensive Chianti with a California Sangiovese? Probably not when that grape represents less than one-half of one percent of the red wine grape acreage here in California. Instead, they probably sell more cocktails or beer and less wine, and the wine they sell will be more expensive and less good, as they trade down to find the cheapest available wines that fit the category they're looking to fill. That will make restaurants more expensive, discouraging customers from dining out and from including wine when they do. Would there be some additional opportunities for California wines, either in new placements or in the opportunity to raise their prices? I'm sure there would. But the resulting higher prices of wine to restaurants and consumers would drive people to other categories of alcohol and to other non-alcohol options, with negative impacts to the category over both short and long term.

All of these economic costs to wineries and the wine ecosystem are serious. It's also worth noting that it would mean the end of an era for the American wine consumer. For nearly a century, the United States has enjoyed the world's most dynamic wine market, with vibrant domestic wineries in every state and the world's best selection of imported wines. That has led to the flowering of wine culture here and allowed the wine market to grow from about 4 bottles per person per year in the 1950s to the roughly 15 bottles per year that are enjoyed today. It has vaulted the United States to its position as the world's largest wine market, the home to two-thirds of the world's Master Sommeliers, and an appealing destination for generations of winemakers, both domestic and international, who settle here, like us, with dreams of making wines that will compete on the world's stage.

Are these tariffs a serious proposal, or just a negotiating tactic? I hope it's the latter. But the reality is that even the discussion of them has negative consequences for American wineries. Their implementation would usher in a new era with much greater and more unpredictable dangers. If this is an issue you care about, please reach out to your federal representatives and let them know. Sometimes an eye for an eye really does make the whole world blind.

Paso Robles gets it right, eventually, on downtown parking

In early May, the Paso Robles City Council voted 5-0 to repeal its five-year-old parking ordinance and restore free parking to downtown. This decision came after several false starts, legal challenges, and a petition drive opposing the parking plan that eventually gathered an estimated 2,400 signatures. And it came over the opposition of the town's Mayor, who commented to the San Luis Obispo Tribune, “It appears this is how a small group of Roblans with little business sense wants to manage downtown public parking for their own gain or in reality, loss” and “I am absolutely done with parking.”

How did we get to this bruising debate? And why did it take so long to come to a conclusion that was overwhelmingly supported by both residents and visitors? The good news is that, in the end, I think they came to the right decision. As for why it became such a saga and why it took so long to come back to where things were at the beginning, that's for me a fascinating story that boils down to the intersection of local politics and market economics. The effort to understand what happened gave me a good chance to dust off my old economics degree, as it pitted two different core theories of economic behavior against each other. 

Back in 2019, in response to the frustrations of some downtown merchants, the city of Paso Robles implemented a kiosk parking system for the eight square blocks immediately around our downtown park. These business owners were worried that their customers were being displaced by employees parking all day in prime downtown spots. So, between 10th Street and 14th Street, and between Spring Street and Pine Street, the city installed 35 kiosks where you could register your license plate for two hours of free parking, or you could pay by the hour for more. The goal was to incentivize employees to park a little further away from the most in-demand parking spots, leaving those spots open for customers. The kiosks were active weekdays during business hours (9am - 6pm). This is a classic implementation of the economic Theory of Price. One of that theory's core postulates is that the optimal market price is the point at which the total number of items available can be reasonably consumed by potential customers. In this case, the marketable good is parking. And the potential customers are parkers. When the price of that parking is zero, it encourages overconsumption, in the form of the employees of downtown business choosing to take up prime spots all day and displacing those stores' potential customers. In theory, raising the price should reduce the demand for those parking spots, meaning that enough of the spots should be open when a customer is looking that they don't have to circle endlessly or park several blocks away. The city quoted a goal of having 85% of the spots filled at peak times.    

From the beginning there was unhappiness with the plan. The kiosks and the downloadable app that paired with them were clunky; the WayToPark app has a 3.2/5 star rating on the App Store, and the fact that there are only 17 reviews is an indicator of how few places used it. It became routine to see worried-looking visitors hurrying from their cars to the kiosks to make sure they figured out what they needed to do before they got ticketed. Older residents filled comment sections of local newspapers saying they just wouldn't go downtown. And the kiosks weren't making enough money to pay for their enforcement, let alone repay the cost of putting them in. In 2021, the City Council expanded the active hours to include weekends and weeknights until 8pm after reporting that the kiosks generated only $45,000 in parking fees during the first 18 months the parking ordinance was in effect, and that the loan balance for the program's research, purchase, and installation was nearly $600,000. To help enforce the parking, it also authorized three part-time enforcement officers (estimated annual cost: around $60,000) to supplement the parking supervisor (annual salary: around $80,000).

Fast forward another two years. By late 2023, significant resistance to the parking plan had grown among residents. And I get it! I'm tech-savvy, and I understand the town of Paso Robles and could usually find a free place to park. I don't think I ever paid for parking, and never got a ticket (though I did have to argue my way out of one when I parked in a loading zone, hazards on, to pick up some take-out). But I still thought it was a mistake. In September of 2023 I sent a note to some community leaders pointing out that we were in a competitive market for tourist visitors, and any friction created by the parking system put us at a disadvantage. I had noted in trips in the fall of 2023 that other attractive California tourist destinations had a simple 2-hour parking limit. The relevant piece of my note was:

I think that the parking app/regulation we have in Paso is a mistake, and puts us at a disadvantage compared to other wine destinations. As I've been traveling around California, I've noticed that towns like Healdsburg, and Sonoma, and Carmel all have a simple 2-hour parking limit in their downtowns. No app to download. No need to text. No payment required. Just move your car after two hours. I don't know the finances of what we have, but I'm guessing it doesn't bring in enough money to pay for itself. And if it leaves a slightly frustrated feeling in visitors' minds as they try to navigate it, that's going to color their experience of visiting Paso overall and make it (by I'm sure a very small margin) less likely for them to want to come back. In this environment where every guest is valuable and we know everyone is worried about traffic, I think we need to be advocating for town policies that benefit us. If I've noticed recently how much easier it is in other places, I'm sure I'm not the only one.

I evidently wasn't the only one expressing my opinion. The City Council had already responded to constituent feedback by creating an ad hoc committee to investigate parking options, which held several sessions soliciting community input. They presented their recommendations to the City Council at a meeting on November 21st. Perhaps not surprisingly, the recommendations that they said had universal support all carved exceptions out from the parking requirements, including free parking on Tuesdays and Wednesdays, more free parking permits for local seniors, free parking in the city lot behind City Hall and the Paso Robles Library, and better signage. After the head of the committee presented the committee's recommendations, the City Council opened the floor to public comment. One commenter after another gave impassioned pleas to urged the city to do away with paid parking in favor of something simpler and friendlier to visitors and locals alike. Against at least 20 comments opposed to the parking plan, there was just one in support of it.

After the commenters were done, the City Council members weighed in. Everyone agreed that the current system was nearly universally unpopular. And yet the decision that emerged was somehow even more onerous. New City Councilmember Sharon Roden asserted that the parking plan didn't satisfy anyone because it was too easily manipulated, that there was a convoluted system in place that people had to navigate which still didn't bring in enough money to cover its costs. She proposed a $2/hour parking charge from minute one. Her plan, she said, would actually achieve the goal of forcing people to think hard about how much they valued downtown parking spots, and would have the additional benefit of raising over $1.1 million dollars to fund the program and pay for another project, adding better lights downtown. Although some council members expressed doubts -- I was impressed, particularly, by Councilmember Fred Strong's reconsideration of his support for paid parking after listening to his constituents -- the Council decided to implement her plan, though at only $1 per hour rather than $2. You could hear audible gasps from the audience.

From an economic standpoint, she wasn't wrong. Putting a value on a scarce commodity encourages its responsible use. But she (and the majority of the Paso Robles City Council) had fallen victim to another classic economic theory: the sunk cost trap. People, businesses, and governments have psychological biases toward evaluating the future value of a project in part through the past costs that have been invested in it. It doesn't matter if those costs can't be recovered. The fact that they were spent means that there is extra incentive to continue forward to justify the past expenditures. In this case, the more than half a million dollars that the city was carrying on its balance sheet that was earmarked as due from the downtown parking program encouraged the city councilors to try to take actions that would repay those costs, even if those actions did not help their constituents.

To me, it was clear that this latest change would result in more harm to their constituents. If even the relatively cost-free system that was in place tended to discourage people from going downtown, adding costs while requiring the use of the same clunky app and kiosks couldn't improve people's experience. We (the city of Paso Robles) are in a competitive market for out-of-town tourists, and compared to the ease of parking in a comparable destination like Sonoma, or Carmel, or Healdsburg, the hassle of dealing with the kiosks, and the potential for a ticket, would act in a small way to color visitors' impressions of their experiences. If even 1% of visitors left with a less-happy memory of their visit here, we had lost their future business. The community had lost their referrals. And the town had lost their future tax revenue. 

If City Council members were in doubt of the community's viewpoint, that doubt was dispelled with the outpouring of glee from residents and businesses that greeted the town's announcement in February that all parking fees would be suspended due to the receipt of a cease and desist letter from a community member that pointed out that the proposal to overhaul the parking system wasn't on the published agenda of the November meeting, and therefore the decision violated the Brown Act. The parking free-for-all was originally supposed to be temporary, but after hearing from business owners at the May meeting that their traffic improved during the free parking period, and receiving the petition signed by 2,400 residents asking them to restore free parking, the city council voted to end it permanently. And now the 35 kiosks are for sale. If you want to track the former footprint of these kiosks, their locations are individually numbered around the downtown square:

Even though I agree with the City Council's decision to restore free parking, it's hard to be happy about the process it took to get here. The city of Paso Robles paid a consultant hundreds of thousands of dollars to decide on a system that cost hundreds of thousands of dollars more. It hired multiple people to enforce a system that never covered its expenses, let alone recouped its initial investment. The debate that resulted pitted business owners against each other and many locals against the out-of-town customers who drive so much of our local economy. The system's clunkiness likely resulted in some degree of guests feeling like a visit to downtown Paso Robles was cumbersome, while a small number of guests likely have an acutely unpleasant memory of a parking ticket. And all because some business owners complained that employees were taking up too many prime parking spots -- and yet couldn't make the case to those employees that they needed to park elsewhere.

As much as I've enjoyed just pulling into a downtown parking spot over the last six months -- and I feel compelled to point out that I haven't once had to park more than a block away from my destination -- it's worth wondering if we're just going to find ourselves back in the same situation the original parking system was designed to address. It seems possible. Maybe businesses will do a better job of instructing their employees where to park. But I'm hopeful that the experience of sourcing, implementing, staffing, and ultimately decommissioning this kiosk-based system would encourage the city to take a different approach should they revisit the issue. If they do, I hope they look to the neighboring communities that I've mentioned a few times in this post, and look to a simple two-hour parking limit. If you overstay your limit, you are subject to a ticket. It doesn't seem like a system like this would require a lot of enforcement, or much in the way of implementation cost.

While it may not be an economic theory, there is a final principle that I think could shed some light on where things went wrong. That principle is Occam's Razor, which states that when presented with multiple solutions to (or explanations for) a problem, the simplest tends to be the best. In this case, a simpler solution seems like it should have been tried before the plan that was adopted. Meanwhile, take a visit to downtown Paso Robles. Spend that minute you saved not having to enter your parking info enjoying the beautiful downtown park. And if anyone you know is in the market for a used parking kiosk, I know where they can find one.

You aren’t hearing as much about the Rocks District as you should be. You might be surprised why.

I’m not sure there’s any American Viticultural Area (AVA) as aptly named as the Rocks District of Milton-Freewater. Located in north-east Oregon just 15 minutes south of the city of Walla Walla, Washington, it’s the closest thing I’ve ever seen to the look of Chateauneuf-du-Pape. Vines grow in deep beds of basalt cobblestones, the product of ancient volcanic eruptions, rolled and smoothed as they were tumbled down from the nearby Blue Mountains by the Walla Walla River and then deposited on the valley floor in an alluvial fan. Adding to the region's allure, it sits at roughly the same latitude as the southern Rhone. A majority of the vines are Rhone-derived; more than 45% of the vineyard acres are planted to Syrah, with other Rhone grapes like Grenache, Picpoul, Bourboulenc, Clairette, Grenache Blanc, and Roussanne all represented too. In just a few short years, the Rocks District has built a reputation as a place to find some of the most interesting Rhone varieties in America.

Neil, Cesar Perrin, Nicolas Brunier and I had the pleasure of exploring this remarkable terroir with Delmas Wines’ Brooke Robertson while we were in town for the recent Hospice du Rhone celebration.

If great wines are borne out of struggle, this region is destined for greatness. Not only do the vines have to navigate the rocks and the paltry twelve inches of rainfall, but they have to live through winter freezes so cold that most producers (including Delmas) now bury their vines every winter to provide insulation, and then unbury them in time to prune and start the growing season¹. The 300 days of sun, the long summer days due to the northern latitude, summer daily high temperatures routinely in the 90s°F and not infrequently in the 100s°F, allow for enough ripening in the short season, which can end with a freeze any time after the calendar flips to October. And did I mention the rocks?

At Hospice du Rhone, the wines from Rocks District fruit were among my highlights of the Grand Tasting, with as clear a signature as any AVA or appellation I can think of. The fact that it’s a small AVA (just 3,767 acres, or less than 1% of the acreage within the Paso Robles AVA) surely helps, along with its climatic uniformity, but I think that the rocks themselves play an important role. As in Chateauneuf-du-Pape, those rocks absorb and reflect the sun, warming the ripening clusters, producing rich, powerful wines with a distinctive umami flavor of baked loamy earth.

The AVA was created relatively recently, with work beginning in 2011 and formal recognition from the United States Tax and Trade Bureau (TTB) in 2015. There are now, according to the AVA’s website, 52 vineyards encompassing 640 acres. More than 50 wineries source fruit from these vineyards, although there are only five production facilities within the AVA’s boundaries. Many more facilities are just a few minutes away, in Walla Walla, the center for wine production (and wine tourism) in the area, and the namesake of the larger AVA in which the Rocks District is nested. And that distance, minor though it seems, provides one of the region’s biggest challenges.

In the federal regulations that govern the American Viticultural Area (AVA) system², there’s a clause that I’d never noticed before this visit. It says that a wine may be labeled with a viticultural area appellation if it satisfies a series of criteria, one of which is that “it has been fully finished within the State, or one of the States, within which the labeled viticultural area is located”. This clause means that all the wineries with production facilities in Walla Walla (in Washington State) can’t label their Rocks District vineyards with its AVA because that AVA lies entirely in the state of Oregon. Delmas is one of those wineries, so their labels just say Walla Walla.

Neil, Cesar, Nicolas and I were frankly flabbergasted by this restriction when we learned about it. After all, what does a state boundary (or for that matter, where a production facility is located) have to do with viticultural distinctiveness? It seemed to me that this goes against the stated purpose of an AVA, which as explained on the TTB’s website, is:

“An AVA is a delimited grape-growing region with specific geographic or climatic features that distinguish it from the surrounding regions and affect how grapes are grown. Using an AVA designation on a wine label allows vintners to describe more accurately the origin of their wines to consumers and helps consumers identify wines they may purchase.”

That I never knew about this clause in the AVA regulations stems from California’s central place in the firmament of American wine. We’ve never seriously thought about getting fruit from other states. We’re excited, with the launch of our Lignée de Tablas program, to explore other California AVAs, and that’s no problem. But the fact that we can get fruit from the Sierra Foothills (6 hours away from Paso Robles) and use their AVA but Delmas can’t get fruit from their own vineyard, 15 minutes away from the winemaking facility they share with dozens of other local wineries, feels unfair.

The TTB in fact foresaw the challenge that the creation of this new Oregon AVA so close to the region’s winemaking nexus in Washington state would pose for producers. In the 2014 notice of proposed rulemaking for the Rocks District AVA, they solicit feedback on the topic:

“TTB is interested in comments from persons who believe they may be negatively impacted by the inability to use ‘The Rocks District of Milton– Freewater’ as an appellation of origin on a wine label solely because they use facilities located in Washington.”

The TTB must have received enough feedback to convince them that there was support for modifying their rules, because the next year they proposed a rule change to address it:

“The Alcohol and Tobacco Tax and Trade Bureau (TTB) is proposing to amend its regulations to permit the use of American viticultural area names as appellations of origin on labels for wines that would otherwise qualify for the use of the AVA name, except that the wines have been fully finished in a State adjacent to the State in which the viticultural area is located, rather than the State in which the labeled viticultural area is located. The proposal would provide greater flexibility in wine production and labeling while still ensuring that consumers are provided with adequate information as to the identity of the wines they purchase.”

I would have thought that the TTB’s proposed rule change would have been uncontroversial, but it ended up far from the case. Organizations that submitted letters in opposition included Napa Valley Vintners, Family Winemakers of California, the Washington State Wine Commission, and the California Wine Institute. Some included proposed changes that would satisfy their concerns, while others just requested that the proposed new rule be scrapped. Even the Oregon Winegrowers Alliance & Walla Walla Wine Alliance submitted a comment in opposition, although the change that they requested was minor. In every case, the stated reason for opposition was because the regional associations worried that state laws that modify the federal regulations overseeing wine production would be unenforceable in a neighboring state. A good example would be the Oregon requirement that to be varietally labeled, a wine must contain 90% of the listed grape, a more restrictive standard than the federal requirement that a varietal wine contain at least 75% of the named grape.

A few of the comments hinted at a second reason: that they were worried that if a cheaper nearby state could make wine from a prestigious appellation, there might be an exodus of jobs to that lower-cost (or less regulated) state, with economic damage to the established reason.

As typically happens when it receives conflicting feedback, the TTB backtracked and the proposed change was never made. This may have avoided the unintended consequences that the regional associations were worried about, but it leaves the producers in the Rocks District with the same challenge that the TTB identified back in 2014. Are they supposed to all build wineries in Oregon when they’re already established in Washington State? Or establish the reputation of their new AVA without the powerful tool of identifying the wines’ place of origin on their labels?

I don’t have a lot of sympathy for the economic argument (made mostly by commenters from the Napa Valley) given that California is already so large, and with such different costs of production, that any negative damage would likely have already happened. Does Napa Valley’s economy suffer when a Paso Robles winery buys grapes and puts out a Napa Valley AVA wine? I don’t see it.³ And even if you did see it, given the size of California, that ship has sailed. 

The other objection, that state wine laws that try to ensure a higher quality product would be unenforceable out-of-state, doesn’t seem to me like an unsolvable problem. In fact, the Wine Institute proposed an elegant solution in their comment objecting to the proposed rule (their addition emphasized):

“(iv) In the case of American wine, it has been fully finished (except for cellar treatment pursuant to §4.22(c), and blending which does not result in an alteration of class and type under §4.22(b)) within the State the viticultural area is located in or an adjacent state, or for, a viticultural area located in two or more States, within one of the States in which the viticultural area is located, and it conforms to the laws and regulations governing the composition, method of manufacture, and designation of wines in all of the States where the viticultural area is located.”

It seems to me like this solution gives something to everyone. Appellations like the Rocks District get to build their reputation by appearing on wine labels. Winemakers get the flexibility to source grapes from diverse regions and tell consumers where they come from, without having to build new wineries across state lines. Grape growers are able to benefit from the reputation of the region they help establish. States retain the ability to enforce regulations designed to enhance quality or distinctiveness. And consumers get more clarity on where the wines they love come from. Let's hope that the TTB revisits this issue soon, with a more tailored approach.

Meanwhile, go out and do a little research on which Walla Walla AVA wines actually come from the Rocks District, and try to find a bottle or three. You won’t be disappointed.

Footnotes:

1. How cold? This January 13^th, the low was -8°F and the high just 4°F.
2. That would be the Federal Register Title 27 Chapter I Subchapter A Part 4 Subpart C § 4.25(e)(3)(iv) for anyone keeping score.
3. I would also note that I think this argument raises commerce clause objections about a state using regulation to protect its businesses from competition from competing businesses in other states.

This time of year, a vineyard's approach to sustainability is clear

If you've ever wondered whether the vineyards you see are farmed chemically or organically, this is the season to check here in California. In an organic vineyard (or at least, one that doesn't use herbicides) mid-winter should show a carpet of brilliant green between, under, and around the grapevine rows. Something like this, which I took out at Tablas last week:

If instead what you see looks like neat stripes of green and brown, you're looking at vineyard rows where the ground has been sprayed with herbicide. It's harder to tell in the summer, because it's standard practice to remove the weeds under vine rows so they don't interfere with the free passage of wind and light among the ripening clusters. Organically farmed vineyards just do that work mechanically instead of chemically. But at this time of year, when you see a vineyard that looks like this, you know what's happening:

There's no guarantee that a vineyard that isn't using herbicides is farming organically. Plenty of vineyards have moved away from glyphosate and other systemic herbicides but continue to use (or at least hold out the option of using) chemical pesticide or fungicide. But I'm not aware of any vineyards for which the opposite is true. Weed control is the easiest piece of moving to organic viticulture in a place like Paso Robles. If they're not doing that, the chances of them controlling insects or fungal pressures non-chemically is in my experience pretty remote.

As for the wineries who have moved away from glyphosate, even if they're still not ready to certify, good for them! I see lots of evidence that we've made progress in the last decade. It used to be, as I drove out Vineyard Drive toward Tablas Creek each day, that nearly every vineyard I'd drive by would have bare ground under the grapevine rows, even in February when the hillsides are vibrant green. Now, it's more like half. That's a sea change in approach. And it's driven by a growth in understanding in the role of soil in farming. Soil, after all, is more than the grains of mineral and organic matter that make up what we call dirt. One of the most fascinating talks I attended at the recent Tasting Climate Change conference was by Marc-André Selosse PhD, Professor at Muséum National d’Histoire Naturelle in Paris. He pointed out that in a single gram of healthy soil there are one million bacteria, thousands of species of fungi, hundreds of amoebas, and tens of millions of virus. These microbes are turning rocks and minerals into nutrient building blocks while fungi are doing the same thing with organic matter. Insects and worms are digesting and mixing the layers. All this allows soil to integrate organic matter from surface plants, resulting in soils that have their own healthy ecosystem. Eliminating the plant layer at the surface strips the soil of the building blocks of fertility, decimates the microbial and fungal populations in the soil, and allows for its compaction, further reducing its ability to absorb and retain water. 

I have hope that we'll see more change coming soon to California. The recent announcement by Napa Green, probably California's most influential sustainability certification, that they'll require vineyards to move away from glyphosate if they want to maintain their sustainability certification, has made a major splash in industry groups. Of course, you're probably wondering if a winery that's been using glyphosate should ever have been able to claim certified sustainable status. And that's a fair point. I've made it myself. But that highlights how widespread its use has been, that in order to get wineries into their programs and then move them little by little to more sustainable practices, every one of the 20+ sustainability certifications in California has until now allowed the use of glyphosate.

Will wineries move to other non-glyphosate herbicides? Perhaps. It's still cheaper to spray with herbicide than it is to remove weeds mechanically each year. But that difference is small in a place like Paso Robles, where the rain stops in April or May and once you remove weeds they don't typically regrow. I am hopeful that other certifications will follow Napa Green's lead, and require that their certified sustainable vineyards will be required to take this first step away from chemical farming. And that this step will lead to more wineries moving toward holistic systems like Biodynamic and Regenerative Organic Certified.

Will they? Each February, you'll have a chance to check in and update your report card. Just look for the brown stripes of dirt.

Wine, health, and the fool's gold of "zero risk"

Over the last year, there has been a steady drumbeat of anti-alcohol messaging percolating out into newspapers and magazines around the world. This messaging is due in large part to a coordinated campaign led by the World Health Organization (WHO), who published a news release in January titled No level of alcohol consumption is safe for our health and last week proposed that governments worldwide double their taxes on alcohol to drive down consumption. This is an important change from their last major initiative from 2010, which was designed to reduce the harmful use of alcohol. 

The negative health effects of the abuse of alcohol are well documented. But the data on light to moderate consumption of alcohol, and particularly wine, is much more equivocal. Low levels of alcohol consumption appear to have modest protective effect on cardiovascular disease and diabetes, and a small negative effect on certain cancers, most notably throat, breast, and colorectal cancer. There is a great article by Felicity Carter in Meininger's International that dives into the data. She points out that the same massive data set on which the WHO based its new recommendations was later analyzed by the Journal of the American College of Cardiology (JACC), which came to five main conclusions:

• Regular moderate alcohol consumption protects against fatal and nonfatal CVD and all-cause mortality, both in healthy adults and in CVD patients.
• The dose-effect relationship is characterized by a J-shaped curve.
• For light-to-moderate levels of alcohol consumption, the risks of some cancers (breast, colorectal, oral) are relatively small and should be considered in the context of each individual global risk.
• Lifelong alcohol abstainers should not start drinking for health reasons only, but should be encouraged to adopt healthy lifestyles (regular physical activity, no smoking, weight control, and dietary habits such as the Mediterranean diet).
• Excessive or irregular (binge) alcohol use is detrimental to human organs and function and is a major public health and social problem.

I'll share the JACC's image of the J-shaped curve, which puts in graphical form the idea that the extremes (total abstention and high consumption) are both higher-risk than low-to-moderate consumption:

This all matters because these sorts of stories drive consumer behavior. A recent Gallup poll showed sharp increases in the percentage of Americans who believe that moderate drinking is harmful:

The increase in the perception that moderate alcohol consumption is bad for health was driven largely by younger Americans (age 18-34). This suggests there's good reason for the worry in the wine world that Millennials and Gen-Z may not pick up the baton in wine consumption as Boomers and Gen-X start to age out of their prime wine purchasing years. Not only is wine competing with other forms of alcohol -- not to mention cannabis, which was seen in the Gallup poll as less harmful -- but the changes in perception are driving the rise in movements like Dry January and sober-curious. 

If the data around moderate alcohol use and mortality is -- at worst -- equivocal, wine seems likely to be comparatively less harmful and more helpful than beer and spirits. After all, it's made from fruit (rather than grain or sugar), it includes heart-healthy compounds like resveratrol and other polyphenols, it's been linked to long lifespans in places like Gers, France, the home of Tannat, and it's more likely to be consumed with a meal instead of on its own, which slows the absorption of alcohol in the blood and seems likely to also have positive interactive effects as a part of the Mediterranean diet.

So why is the WHO taking such a strong stance against alcohol, collateral damage be damned? I'm sure it's hard for an organization tasked with optimizing health outcomes to roll out a nuanced policy on a product that is capable of causing such harm when misused. If they did, it would probably look something like this summary from the Harvard School of Public Health. It would look at whether you were by family history more predisposed toward cardiovascular disease or cancer. It would look at your age and drinking history. It would make recommendations on how you drink as well as how much.

Back to the WHO's press release. In one key paragraph, they say "To identify a “safe” level of alcohol consumption, valid scientific evidence would need to demonstrate that at and below a certain level, there is no risk of illness or injury associated with alcohol consumption." Whatever you think of their analysis of the data (and I think they're setting an impossible standard of evidence) my bigger question is this... is our decision tree about what to do supposed to be driven by zero risk? I do things every day that have non-zero risk. So do you. Some of the things I've done in the last week include driving (risk of accidents), road biking (risk of crash), hiking (risk of injury), and attending sporting events (risk of contagion). Our goal in life shouldn't be to eliminate risk. It should be to properly evaluate it and weigh that risk against any potential benefits.

Maybe the WHO has concluded that a broad-based attack on all alcohol is the only way to get at the problem drinkers and the personal and societal harm they cause. And it's important that we as a society and an industry wrestle with that challenge. But none of that changes the overall picture for the individual consumer. Moderate alcohol consumption is unlikely to either significantly increase or decrease your health outcomes. I'm suspecting that if you're reading this blog, you've already decided that it increases your pleasure.

Consider yourself a risk taker.

---

GOVERNMENT WARNING: (1) According to the Surgeon General, women should not drink alcoholic beverages during pregnancy because of the risk of birth defects. (2) Consumption of alcoholic beverages impairs your ability to drive a car or operate machinery, and may cause health problems. 

Tablas Creek can now ship to Connecticut and South Dakota! Why did it take so long?

In 2021, I wrote a Wine Shipping State of the Union, in which I broke out the 50 states and the District of Columbia into seven tiers based on the cost and convenience for a winery to ship to that state's consumers. If this isn't something you follow, you might be surprised that it can vary so much from state to state, but blame the 21st Amendment, which repealed Prohibition. That Amendment, intended so that states that wished to remain "dry" could do so, gives states broad leeway to regulate the sale of alcohol within their borders, and this has meant that no two states are alike in the licensing, fees, reporting, and restrictions that they've put in place.¹

Each winery makes a different calculation as to which states are worth the costs of doing business there. Some smaller wineries only ship to their home state, but most wineries with significant direct-to-consumer business ship to most of the 33 states that I put in my tiers I - III. There are another 12 states (my tiers IV - VI) in which shipping is possible for most wineries, if they're willing to absorb the costs and jump through the right hoops, and 6 to which it's essentially prohibited (my tier VII). At the time, we shipped to 8 of those 12 in tiers IV - VI. I am pleased to announce that we've done the work to add two more shipping states to our list: Connecticut and South Dakota. Our new shipping map:

What do South Dakota and Connecticut have in common? They're both states with label registration requirements. You might think that the federal label registration that we have to go through to sell our wines in America would be enough, but these two states have seen a potential revenue opportunity, and ask any winery that wants to sell its wines in that state to individually register each label with the state government. For South Dakota, it's $25/year for registering the first label and $17.50 for each subsequent label, paid to the South Dakota Secretary of Revenue. For Connecticut, it's $200/label, with each registration lasting three years and being transferrable across vintages, as long as you don't change the varietal mix or need a new federal label approval.

A quick look at our online order form will show our challenge: we currently list 34 different wines, and if you count different sizes and vintages there are a total of 51 different products listed. Each vintage of our blends is a little different, and we believe that it is important that our labels reflect that. All that leads to a lot of additional expense and hassle for the states which require us to register labels. The biggest reason that we haven't worked with those two states to date has been our worry that something will slip through the cracks and we'll get in trouble for sending wine we aren't registered to sell, as well as the burden this places on our back-office team. But I'm generally a believer that we need to do everything we reasonably can to make our wines available to the customers who want to buy them, even if the costs of doing so are high. So, we've jumped through these hoops² and I'm pleased to announce that customers from Connecticut and South Dakota who wish to order wine or sign up for one of our wine clubs can now do so.

That said, I still hope that these two states see reason and realize that the amount of revenue that these registration requirements bring in is a drop in the bucket of their state's budget. I don't know how it compares to the amount that they have to pay staff to administer the programs, but I'm guessing it's a wash. And like most state protectionism, it's ultimately the state's citizens who lose by paying higher prices and having less selection. 

The next state in our sights is Alabama. The state legislature there passed a shipping law in 2021, but it included some unworkable provisions that needed to be ironed out by the state ABC board, mostly owner citizenship and residency requirements that were unworkable for wineries with foreign partners like us. It appears that's been done. Stay tuned. Meanwhile we've at least found a work-around for Alabamans: while we can't ship to private homes or businesses yet, we can ship orders to a state ABC store for pickup. If this is something you'd like to try, please give us a call. 

Every time I dive into the arcana that is our alcohol regulatory framework, it drives home the wisdom of the founding fathers in including the Commerce Clause into the US Constitution. This clause prohibits state interference in interstate commerce, which means that the producers of most products don't have to hire compliance companies or dedicate staff members to making sure that all the different licenses, reports, and remissions are done properly. That clause is probably most eloquently explained in the 1949 Supreme Court decision H.P. Hood & Sons vs. Du Mond:

"Our system, fostered by the Commerce Clause, is that every farmer and every craftsman shall be encouraged to produce by the certainty that he will have free access to every market in the Nation… Neither the power to tax nor the police power may be used by the state of destination with the aim and effect of establishing an economic barrier against competition with the products of another state or the labor of its residents."

We may not be close to "free access to every market in the Nation"... but at least we've increased the number of those markets from 41 to 43. Number 44 is on the horizon. That's something to celebrate.

Footnotes:

1. If you'd like to get involved in the push for more open direct shipping laws, the nonprofit Free the Grapes, on whose board of directors I serve, has information, resources, and templates for contacting state representatives. 
2. Thank you to the Wine Institute for intervening with Connecticut to help us overcome the largest hurdle: that because we sell our wine wholesale through Vineyard Brands (an importer with a wholesaler network in all 50 states) instead of directly to a wholesaler there, the state needed to make accommodation for the same winery to have its labels registered by two different companies. Until recently, this wasn't possible.

Assessing the 11 Paso Robles sub-AVAs after their first decade

In September of 2013, the TTB published a notice of proposed rulemaking that gave a preliminary stamp of approval on the Paso Robles wine community's proposal to subdivide the Paso Robles AVA into 11 new sub-regions. I celebrated this milestone with an article on this blog where I laid out why I thought it was such an important development for our region. It's worth remembering that at the time there was some resistance to the proposal as being disproportionately complex given that up until that point everyone had used just the single overarching Paso Robles AVA. I tried to summarize why I thought it was important:

These new AVA's will be a powerful tool for wineries to explain why certain grapes are particularly well suited to certain parts of the appellation, and why some wines show the characteristics they do while other wines, from the same or similar grapes, show differently. Ultimately, the new AVA's will allow these newly created sub-regions to develop identities for themselves with a clarity impossible in a single large AVA.

The proposal was ultimately approved in October of 2014, and we started using our own sub-AVA (the Adelaida District) on the labels of our estate wines with the 2014 vintage. Our Patelin de Tablas wines, which are sourced from several of the sub-AVAs, continued to use the umbrella Paso Robles AVA. Of course, there was no requirement that wineries use these sub-AVAs. From my conclusion of that 2013 blog:

Wineries who wish to continue to use only the Paso Robles AVA are welcome to. And many will likely choose to do so as the new AVA's build their reputation in the market. Not all the AVA's have a critical mass of established wineries, and it seems likely that a handful of the new AVA's will receive market recognition first, while the reputation of others will take time to build. But I believe that it will be several of the currently less-developed areas that will benefit most in the long term, through the ability to identify successful winemaking models and build an identity of their own. We shall see; having a newly recognized AVA is not a guarantee of market success, just a chance to make a name for yourself.

All this came back to me last week when I fielded a call from veteran writer Dan Berger, asking my thoughts on the success of the AVAs given that most of the big Cabernet producers he sees haven't been using them. To my mind, that's neither here nor there, since those producers are typically large enough that they're sourcing grapes from multiple sub-AVAs and therefore can only use the umbrella Paso Robles AVA anyway. And there are exceptions even to this, most notably Daou, which uses the Adelaida District AVA on all its estate wines. But it did make me wonder the extent to which the different AVAs were appearing on labels and therefore being presented to consumers as a point of distinction. 

The best way to measure this would be label approvals from the TTB, but I don't think there is a way to search their publicly available database by AVA. Origin, sure... you can search, for example, by California. But not by Adelaida District. But there are proxies available that can give a good indication: the major publications to whom wineries submit thousands of wines each year. So I dove into the review databases at Wine Enthusiast, Wine Spectator, and Vinous. Because each publication receives and reviews a different subset of the wines that are produced, I've included a summation of all three, with the number of reviews that a search for each sub-AVA produces for vintages since the new AVAs were announced. The total for the Paso Robles AVA (reviews that don't list a sub-district) is at the bottom:

Paso Robles Wines Reviewed, by AVA, 2013-2022 vintages
	Wine Enthusiast	Wine Spectator	Vinous	Total	% of Total
Adelaida District AVA	611	249	773	1633	16.8%
Willow Creek AVA	427	261	674	1362	14.0%
Templeton Gap AVA	154	26	115	295	3.0%
Santa Margarita Ranch AVA	49	33	38	120	1.2%
Geneseo District AVA	34	5	55	94	1.0%
El Pomar AVA	45	2	40	87	0.9%
Paso Robles Highlands AVA	44	9	27	80	0.8%
Estrella District AVA	28	2	49	79	0.8%
Creston District AVA	8	0	25	33	0.3%
San Miguel District AVA	5	0	14	19	0.2%
San Juan Creek AVA	0	0	0	0	0%
Paso Robles AVA	3531	709	1691	5931	60.9%

So, nearly 40% of all the wines reviewed by these publications carried one of the 11 new AVAs on their label. Is that surprising? I'm not sure, but I do think it's an encouraging sign that the producers here think that the AVAs are or will become meaningful in the marketplace. When you figure that many of the rest of the wines (like our Patelins) weren't eligible for one of the sub-AVAs, the clear implication is that most Paso Robles wineries are using the smaller, newer designations when they can. Even J. Lohr, whose founder Jerry Lohr was quoted in Dan's article as saying "We’re not selling our Cabernets based on the sub-appellations," has used the El Pomar AVA on at least three wines, the Adelaida District on at least three others, and the Estrella District on yet three more.

And yet, while all the new AVAs except San Juan Creek have appeared on labels, it's worth considering why more than three-quarters of the wines that use the sub-AVAs are coming from the Adelaida and Willow Creek districts. Some of that is the profile of the wineries who have settled in these two AVAs, which include many of Paso Robles' highest-end producers often making dozens of small vineyard-designated bottlings each year. Willow Creek wineries -- including Saxum, Denner, Epoch, Caliza, Paix Sur Terre, Thacher, and Torrin -- and Adelaida District wineries -- including Daou, Alta Colina, Adelaida Cellars, Law, Villa Creek, and Tablas Creek -- account for a much more significant percentage of the wines reviewed in these databases than they do the percentage of production within the broader Paso Robles AVA. The choice that these high-profile wineries have made to put their AVAs on their labels encourages their neighbors to do the same.

Will the other districts -- many of which have more planted vineyard acres than Adelaida and Willow Creek -- eventually catch up? I'm not sure. As long as much of that acreage is going into wines whose production is measured in the hundreds of thousands or millions of cases, and therefore being sourced from multiple sub-AVAs, maybe not. But I've always thought that some of the AVAs with the most to gain are ones like El Pomar and Creston whose cooler climates and higher limestone soil content makes them more akin viticulturally to the more prestigious regions to the west, but whose location on the east side of the river tends to get them lumped in with warmer, sandier regions like Geneseo and Estrella to their north.

Paso Robles AVA map from the Paso Robles Wine Country Alliance website

Ultimately, time will tell whether more of the 11 Paso Robles AVAs join Willow Creek and the Adelaida District as something that people look for on their labels. Meanwhile I think it's healthy that Paso Robles as a region remains centered in people's awareness. Although in Dan's article Gary Eberle implies that the decision to advance a conjunctive labeling law -- which requires that Paso Robles be used on the label alongside whatever sub-AVA is used -- was a controversial one, I don't know any producer here who opposed it. It's a good thing that the recognition for Paso Robles continues to grow even as people start to understand what makes the different parts of the broader AVA unique. And promoting Paso Robles isn't incompatible with also building recognition for the diversity within it -- in fact, doing so will help consumers understand why the wines that they love have the character that they do, and give them guidance for how to further explore this region.

What it comes back to, for me, is that the science for subdividing the Paso Robles region is pretty conclusive. This morning's Paso Robles agricultural forecast, as an example, shows different weather stations within the region recording high temperatures yesterday ranging from 74.2°F to 92.9°F, low temperatures yesterday morning ranging from 42.9°F to 55.7°F, and heat accumulations for the growing season from 1533 growing degree days to 2510. Vineyards in Paso also vary by elevation (between 600 feet and 2400 feet), rainfall (between 7 and 30 inches annually) and soils (a dozen major soil types encompassing everything from high pH calcareous to low pH alluvial and loam).

The roughly 60 local vineyards and wineries who together commissioned and funded the Paso Robles AVA proposal -- which included both Gary Eberle and Jerry Lohr -- agreed, as a region, to bring scientists in from UC Davis and Cal Poly, and to defer to their findings as to where the lines should be drawn between the different AVAs. We knew at the time that this would likely mean that there would be AVAs drawn that didn't have a critical mass of wineries yet to help spearhead that sub-AVA's recognition. And we decided that this was OK. If the lines were drawn in the right places, over time, the AVAs that were capable of doing so would achieve recognition in the marketplace. Back in 2015, I laid out in a blog why the wisdom of this decision would only play out over time. A decade in, I think that we're well on our way.

Unpacking a Potential Wine Scam

A little more than a decade ago, I got a scam email that was a fairly sophisticated attempting to cheat us out of thousands of dollars in shipping charges. I posted it on this blog, breaking down why it was a scam and what would have happened had I followed through, and heard from dozens of other members of the wine community that they'd received the same email and in researching its validity ended up at my blog. In a few cases I heard from people on the verge of wiring money to the fraudsters. And as versions of that scam email kept circulating over the subsequent decade the blog, I and other commenters kept updating the details until it became a kind of evolving archive of scam attempts and the names that the scammers were using. 

So, in that spirit, I'm sharing the following scam email I received a couple of weeks ago:

From: TONY NOVICK [mailto: [email protected]]
Sent: Thursday, April 27, 2023 10:51 AM
To:
Subject: TOUR

Dear Sir/Madam,

How are you? I hope this mail meets you well and in good health. I"m writing to make an inquiry.

I am one of 20th members in a private wine club in the United Kingdom that we call "TERROIR ELITE CLUB". 20 of us are going to visit your place and we are staying in a house around your area.

From there we will travel around and see different places and especially we are going to see some wineries, estates, cellars, Vineyards, breweries, distilleries, Museums and extra virgin oil facilities so we wonder if it's possible to visit your facility on FRIDAY, 25TH OF AUGUST, 2023 and maybe taste some of your wines, beer, spirits, extra virgin oil or any other of your regional products?

However, We are also free to undertake in any other kind of tours, guided tours, visits, leisure experiences or adventurous activities.

If you will be available on the requested date, urgently send us your quotation and total cost for the 20 persons coming to your facility for "TOUR" or "VISIT" on FRIDAY, 25TH OF AUGUST, 2023.

Finally, if our date is not suitable for you, get back to us since our date of visitation is still flexible.

Thanks in advance

Yours Faithfully,

Mr. Tony Novick.

ADDRESS: 33 Great Queen St, London
WC2B 5AA,
United Kingdom
EMAIL: [email protected]

NB: All replies and correspondence to be forwarded to "[email protected]
"

As I did last time, I'll break down why it's tempting, what gives it away as a scam, and what might have happened had I followed through.

Why it works
Like most scams, the note plays on a winery's desire to believe that their profile is high enough that people they don't know will search them out. And we do get inquiries to visit from people and groups that we don't know all the time. Getting 20 visitors who are members of a private wine club in the United Kingdom seemingly offers a pretty good chance of a substantial sale. And unlike many scams the written English in the email is believable. Not flawless, but believable. And there's no hard ask here... no request for money or banking information, nothing even that seems suspicious. That might encourage someone to reply, thinking that they have little to lose and allowing the scammers to make further contact with someone they know is potentially interested.

Why it's a fake
First, there is no mention of the name of the winery or even more suspiciously the town or region in the letter. If you're going to try to reach out to Tablas Creek to schedule a visit, wouldn't you mention Paso Robles in the note? Second, it's pretty clear they're casting a wide net. They're interested in visiting not just cellars, estates, wineries, breweries, and distilleries, but Museums? Apologies to our adorable Pioneer Museum, but no one comes to Paso Robles to go to museums. And also open to other sorts of "tours, guided tours, visits, leisure experiences or adventurous activities"? Stretches credibility. Third, there was no visible "to:" address, and my address was in the hidden "bcc:" field, presumably because this was sent to many hundreds or thousands of emails hoping one or more would bite. Fourth, when I plug the address that Mr. Novick gives into Google Maps it returns a barbershop, Ted's Grooming Room. Fifth, the return address is a yandex.com address, a Russian domain not widely used in the UK. And sixth, how many people named Tony Novick are likely to have their actual email be "[email protected]"?

What would happen if I followed through
There is a tremendously informative Facebook post by Bacchus Winery in Virginia, from January of 2020. They share a nearly identical letter, though at that time it was purportedly from a Gabriel Dawney, and the name of the club was "Bacchus Klaus". Bacchus's owner replied to the note quoting a modest tasting fee and received a check for more than £3,500, or over $5,000: 

In his notes, he reports that if he'd deposited the check he'd have given routing information to the fraudsters. I don't think that's right, especially if (as I'm sure is the case) the check is fraudulent. Instead, what seems likely is that the purported visitors would ask that the overpay be returned to them in some non-cancellable form like a wire transfer or a Western Union payment. If the business resists, they would likely become more and more insistent and eventually threatening about repayment. When your bank rejects the fraudulent check, you'd be out whatever you'd refunded for their "overpayment". The fraudsters, probably in Russia given their email address, face little risk of enforcement.

It's not clear that there's anything that the American authorities can do about this. Relations between the United States and Russia are far from cordial at the moment, and a report of petty crime is unlikely to be pursued, let alone lead to any action against perpetrators. Plus, email addresses are easy to spoof, and at relatively small sums law enforcement usually doesn't even bother to try. So, Tony Novick, or Gabriel Dawney, or whoever you are, you'll have to make do without a visit to our winery, estate, cellar, vineyard, brewery, distillery, and/or museum. Seller beware.

Petitioning the TTB to recognize Muscardin: the 14th and final Chateauneuf du Pape grape in the Beaucastel Collection

This week we are filing a petition to recognize Muscardin for use as a grape variety name on wine labels in the United States. The petition, ready to go out today, includes a letter of support from the Assistant Director of Foundation Plant Services, excerpts from four esteemed reference books on wine, the grape's Wikipedia entry, the original 1936 declaration and the current statute that regulate the Chateauneuf-du-Pape appellation, the entry in Pierre Galet's seminal ampelography Cépages et Vignobles de France with its translation, and even the Beaucastel poster that includes lithographs of the thirteen grape varieties. I hope it's comprehensive enough:

Why, you might ask, do we need to petition to use a grape name on our label? It's because all alcohol labels need to be approved before use by the Alcohol and Tobacco Tax and Trade Bureau (TTB), a division of the Department of the Treasury, and if you use a grape variety name on your label, that (or those) need to be grapes that the TTB recognizes. The regulation setting up this framework was adopted in 1996 by the BATF (the precursor to the TTB), with a clearly stated purpose:

These regulations are intended to provide specific and accurate labeling of grape wines labeled with grape variety names. They are intended to prevent consumer deception by eliminating misnamed grape variety names, and by eliminating the use of many synonyms for prime grape names. They are expected to aid in the identification of grape wines by consumers and to make labels easier to understand through the use of more meaningful labeling terms. Finally, ATF believes these regulations will enable consumers to be better informed about wines and the grape varieties used to produce them. 

That 1996 regulation included a list of 251 recognized grape names, 20 grandfathered synonyms (such as Shiraz for Syrah, Fumé Blanc for Sauvignon Blanc, and Pinot Grigio for Pinot Gris), and 61 grape synonyms whose use was to be phased out within a few years. It also included a mechanism by which any interested party could petition to have the list of grape names amended to add new varieties as they were imported or developed. The criteria for approval are clearly laid out:

1. Any interested person may petition the Director for the approval of a grape variety name. The petition may be in the form of a letter and should provide evidence of the following—
   
   1. acceptance of the new grape variety,
   2. the validity of the name for identifying the grape variety,
   3. that the variety is used or will be used in winemaking, and
   4. that the variety is grown and used in the United States.
2. For the approval of names of new grape varieties, documentation submitted with the petition to establish the items in paragraph (a) of this section may include—
   
   1. reference to the publication of the name of the variety in a scientific or professional journal of horticulture or a published report by a professional, scientific or winegrowers’ organization,
   2. reference to a plant patent, if so patented, and
   3. information pertaining to the commercial potential of the variety, such as the acreage planted and its location or market studies.

This will not be the first petition we have submitted. Back in 2001, my dad petitioned for the recognition of Grenache Blanc, Counoise, and Picpoul Blanc. In 2012, he sent in petitions for four more: Bourboulenc, Picardan, Vaccarese, and Terret Noir. All those were approved, along with 89 others, and are now on the list of the 347 grapes allowed on American wine labels. With this Muscardin petition, we're hoping to make it 348. 

Muscardin's journey to this point has been a long and challenging one. The field cuttings we took from Beaucastel of the seven grapes we imported in 2003 were all found to have virus, and while Terret Noir and Clairette Blanche were released in 2009 after one round of virus cleanup, it took Picardan (released in 2012) two rounds, Bourboulenc, Vaccarese, and Cinsaut (released in 2015) three rounds, and Muscardin four separate rounds of cleanup by the experts at the Foundation Plant Services station at UC Davis. This meant that we didn't get vines to propagate until 2018, and the first buds weren't available to graft until 2019. We grafted five surplus rows of Grenache Blanc over to Muscardin that summer, and got our first small crop -- enough to make just 30 gallons, or one half-barrel -- in 2021. That wine was pale but spicy and red-fruited, with a minty/herby/juniper note, good acids, and nice saltiness on the finish. It was appealing enough that we felt it should go into our Le Complice. It became a part of the blend in June of 2022 and has been sitting in foudre since then. Now that we're getting ready to bottle and label it, the grape needs to be approved.

What do we expect to get from Muscardin? It's more of a hope than an expectation. Muscardin is rare enough in France that there's not a lot of literature on it. When I wrote the Muscardin entry in my Grapes of the Rhone Valley blog series, it turned out that there wasn't a lot of information available, perhaps unsurprising given that Muscardin's total footprint was less than 50 acres worldwide. It was first recognized in 1895, and was included in the list of approved Chateauneuf-du-Pape grapes when the appellation was established in 1936. The best explanation of its value that we've been able to turn up is a great quote from Baron Le Roi of Chateau Fortia that John Livingstone-Learmonth recounts in his 1992 book The Wines of the Rhone: "You know, we would be better off here if we replaced the Cinsault with the Muscardin. The Muscardin doesn't produce a lot, makes wine of low degree and spreads out over the soil, preventing tractors from passing freely between the vines, all of which combine to put people off it. But I believe that it gives a freshness on the palate and helps the wine to achieve elegance." From the one vintage under our belts, that use -- to provide freshness and elegance -- seems like one worth more exploration. 

It's always been our goal to plant and vinify all sixteen grape varieties in the Beaucastel vineyard. This includes the thirteen "traditional" Châteauneuf-du Pape grapes, plus Viognier and Marsanne (allowed in Cotes du Rhone and found in the Coudoulet de Beaucastel section of the property) and Grenache Blanc (covered under the "Grenache" entry but not counted in the tally of thirteen). Now that we're able to take this last step with Muscardin, a foundational goal of my dad's is finally within reach. Hey, it's only taken 34 years.

Why is Glass Recycling in the United States So Dismal?

Glass is a product with clear advantages. It's made from a readily-available and non-toxic source (sand). It's exceptionally stable and nonreactive, and so provides a terrific vessel for containing products like wine that you might want to store for decades. And it can be melted down and reused without any degradation of its quality, so it's a perfect product for recycling. And yet, in the United States, it's recycled less than a third of the time. This fact is one of the main reasons we've been exploring alternative packaging like the bag-in-box that we debuted for our Patelin de Tablas Rosé earlier this year. But it doesn't have to be this way. Other countries recycle a much higher percentage of their glass than we do here. I found our depressingly low rate of glass recycling eye-opening enough that I have spent a fair amount of time over the last few months researching why. The conclusions say a lot about what our society and industry values right now. I'm guessing and hoping that this information might be eye-opening for you as well.

Before we start investigating why, a quick review of the facts. According to the EPA, in the United States our glass recycling percentage is 31%, and non-recycled glass represents about 5% of the waste that goes into American landfills each year: 7.6 million tons of glass annually. Our recycling rate is less than half of that in Europe (74% overall) and one-third of the best-performing countries like Sweden, Belgium, and Slovenia (all over 95%). And it's actually worse than those numbers appear, since a significant percentage of the glass that is collected and classified as "recycled" in the United States is in fact crushed up and used for road base rather than melted down and used to make new glass.

The stakes are significant. Recycling glass has positive impacts not just on the waste stream, but on energy use and greenhouse gas emissions. According to the Glass Packaging Institute, making new glass containers from recycled glass saves between 20% and 30% of the energy, roughly 50% of CO2 emissions, and offsets a greater-than 100% requirement for inputs, compared to working from raw materials. What's more, according to a 2017 survey by the Glass Recycling Coalition, 96% of Americans want and expect that glass be included in their recycling options.

So why, if waste glass is a usable commodity, if consumers expect to recycle it, and if doing so saves on cost compared to working from raw materials, isn't the picture here better? The consensus among experts is that it boils down to three main factors.

• The most widely adopted recycling system in the United States is problematic for glass. Single-stream recycling, in which glass, plastic, and paper are co-mingled in a single bin for pickup and transport to a materials recovery facility (MRF), is overwhelmingly the most common community-sponsored recycling system in America. It is convenient for households, who can toss all their recyclables in one place, and for solid waste companies, who can pick them up with one truck. However, while plastic and paper are unlikely to be damaged in the collection process, glass is fragile and often shatters in the collection process, becoming difficult to sort and also contaminating the other recyclables. Plus, single-stream recycling systems encourage “wish-cycling” where consumers throw nonrecyclable products like light bulbs, plastic bags, soiled cardboard, and Styrofoam into their bins figuring that it’s better to over-recycle than to throw away something that’s recyclable. Doing so adds cost to the recycler and sometimes leads to it being less expensive to send loads to the landfill than pay the cleaning and sorting costs. By contrast, multi-stream recycling systems, in which glass, paper/cardboard, and plastic are placed in different receptacles and collected separately, bypass the MRF entirely and can usually go straight to a processing facility. The downside of these systems is that they cost more for the municipality and solid waste companies, and there is often not the political will to pass along these costs to taxpayers. But the difference is outcomes is stark: just 40% of the glass that goes into single-stream recycling systems ends up getting recycled, compared to 90% from multi-stream recycling systems.

• The United States is big. There are roughly 400 MRF facilities around the country. But there are many fewer glass processing facilities, which turn recycled glass containers into cullet, or usable fragments often sorted by color: just 63 nation-wide, in 30 states. There are even fewer glass manufacturing facilities: just 44, in 21 states. Processing facilities are often far away from population centers where glass is collected and MRFs built. Glass is heavy and bulky, which means that the transportation costs from MRF to processing facility can, absent other incentives, raise the price of the cullet that results high enough to outweigh the savings from using recycled glass.
• Transparency is low, both pre- and post-consumer. First, from the post-consumer end. Most people don’t know what happens to their recyclables once they’ve been collected. Consumer surveys show that residents overwhelmingly want their communities to recycle, and reasonably assume that if they do their part their municipality will take care of the rest. But municipalities have little incentive to report on what happens after the recycling is collected. Do you know where your town’s recyclables are sorted? Or what percentage is sent to the landfill? Do you know whether the process makes or loses money for the community? I didn’t. And communities, which have largely chosen a recycling system that gives consumers a false sense of effectiveness, don’t have the incentives to make this information easy to find. Second, from the pre-consumer end. Have you ever seen a wine label display the recycled content of their glass? I don’t think I have. That’s an indication that wineries don’t think that their customers care about this information, or at least don’t care enough to displace other content in what is valuable and scarce label real estate. And bottle suppliers don’t seem to think that wineries care about this information. We pushed our glass supplier TricorBraun to get us bottles with the highest-possible percentage of recycled glass. Our antique green bottles are made with between 60% and 70% recycled material, and our flint (clear) bottles made with 35-50% recycled material. That’s the most that’s available for domestically-produced wine bottles. But that information isn’t easy to find. If you look at TricorBraun's selection of Burgundy-shaped bottles, each listing includes information about their weight, base diameter, color, neck size, height, punt height, mold number, capacity, finish, and style. But there’s no information on the bottle’s recycled content. That’s surely an indication that bottle suppliers either don’t see this as a point of differentiation or don’t have recycled content widely enough available for the resulting information to be worth sharing. And wine isn’t unique. Glass containers, whether for beverages, food, or household products, don’t typically disclose the amount of recycled content. All this makes it difficult for a consumer to make informed purchasing decisions. 

So what’s the way forward here, for consumers and wineries? I see a few possible avenues that could help.

• Wineries: ask your bottle brokers and manufacturers about the recycled content of the bottles you buy, and demand bottles with as high a recycled content as possible. It’s clear to me that bottle producers and brokers are not sufficiently focused on increasing the recycled content of their products. If that’s the case, it’s because it isn’t being asked of them by their customers. Wineries of all sizes, but particularly larger ones, have significant market power. We’re not a large winery, but we will still buy something like 350,000 bottles this year. The larger the winery, the more power you have to move the needle. And for wineries who are a part of organizations like International Wineries for Climate Action (IWCA) and committed to achieving meaningful carbon footprint reductions by 2030, increasing the recycled content of your glass bottles should be a piece of the solution you’re pursuing, along with reducing the weight of those bottles and exploring alternate packaging. Because the glass bottle accounts for more than half the carbon footprint of the average California winery, it also offers the most important target for improvement. 
• Sustainability certifiers: Add a recycled glass component to your winery metrics if you haven’t already. Most California wineries are a part of a sustainability program. But at least our local program (SIP Certified) doesn’t appear to have any mention of using recycled glass in your bottles in its protocols. I have my issues with sustainability programs, which I’ve shared at length here and elsewhere, but they remain a powerful tool in incentivizing the high percentage of wineries who participate in them to make incremental positive changes. (And wineries, if you’re a part of a sustainability program that doesn’t include anything about this, ask them why.)
• Consumers: Ask the wineries that you patronize about the recycled content of their bottles. If you have a direct relationship with any wineries, reach out to them directly. Wineries are unusual consumer products in that most do have direct relationships with many of their customers. But if you don’t, ask your local retailer. If they don’t know, they can ask the distributor. The more people along the supply chain who are inquiring about this information, the more pressure there will be on bottle suppliers to use more recycled content, the more market there will be for recycled glass, which will make it more attractive for communities to recycle their waste glass rather than sending it to the landfill.
• Everyone: Push your communities to be more transparent about the outcomes of their recycling programs. This is particularly important if you’re a part of a single-stream recycling system. If the recyclables are being sorted and used at a high rate, that’s great. But it’s likely not. If not, push for multi-stream recycling, or at least better education on why materials aren’t being used. Is it because of contamination? If so, encourage your community to share information about the costs of “wish-cycling”. Is it a cost decision? Find out what it would take to implement a multi-stream recycling program. There are real challenges here, particularly with the market for recycled commodities still developing. But the status quo, where local governments are quietly misleading their citizens about the efficiency of their recycling programs, isn’t viable.

We know that we can do better, because European countries have shown the way, typically with a combination of multi-stream recycling (to produce good supply) and industry mandates for recycled content (to ensure that there is demand). Neither of those are impossible here; they're just a question of focus and political will. Yes, distances are shorter in Europe; the more densely populated continent means that the shipping costs between consumer collection and glass processing are less. But that’s an incremental difference. If there were more demand from consumers and beverage producers, there would be more recycled glass products available. And that would create a positive feedback loop that would encourage better recycling decisions at the community level.

Photo modified from the original on Wikimedia Commons by user Ecovidrio

We can do the same, or something similar, here. Let’s get to work.