Public Hearings on Appellation of Origin, Viticultural Area, and Estate Bottled Volume 11 Transcript of Hearing February 25, 1977 Washington DC

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by  ATF

VOLUME 11
TRANSCRIPT OF HEARING
FEBRUARY 25, 1977
WASHINGTON, DC
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:
'l DEPARTMENT OF THE TREASURY
2 BUREAU OF ALCOHOL, TOBACCO & FIREARMS
3 VOLUME 2
4 x
5 In the Matter of: :
6 Public Hearing on :
"Appellation of Origin"
:
7 "Viticultural Area" and :
"Estate Bottled" Definitions
:
3
x
9
10 Room 5041
1200 Pennsylvania Ave.
11 Federal Building
Washington, D.C.
12
February 25, 1977
13
The above-entitled matter came on for Public
14 Hearing, pursuant to notice, before Rex D. Davis,
Director of the Bureau of Alcohol, Tobacco & Firearms,
13 DOT, at 10:00 a.m.
IS
APPEARANCES
17
REX D. DAVIS
13 Director of the Bureau of Alcohol,
Tobacco & Firearms, DOT
19
STEPHEN E. HIGGENS
20 Assistant Director, Regulatory Enforcement,
Bureau of Alcohol, Tobacco, & Firearms, DOT
21 MARVIN J. DESSLER
Chief Counsel, Bureau of Alcohol,
22 Tobacco & Firearms, DOT
23
24
25
r, O. <3, $Y$?tM3. inc.
,
1 TABLE OF CONTENTS
2
3 STATEMENT OF JOE OKADA, Consumer
4 STATEMENT OF PHILLIP SELDON,
Vintage Magazine
5
STATEMENT OF ABRAHAM M. BUCHMAN
6 American Wine Institute
7 STATEMENT OF GEORGE W. McRORY,
American Wine Society
a
STATEMENT OF JACK EASLEY,
9 Easley Enterprises
10 STATEMENT OF J.N. HORROCKS
Staff Assistant to Ralph Nader
11
STATEMENT OF G. H. MOWBRAY,
12 President of Mpntbray Wine Cellars, Ltd,
13 STATEMENT OF THOMAS E. O'NEILL
National Association of Alcoholic Beverage
14 Importers
IS
18
17
13
19
20
21
22
23
24
25
17
t MR. DAVIS: The hearing is called to order.
2 This morning we will start with Mr. Joe- Okada who
3 is a consumer.
4 MR. OKADA: Do I speak from the floor here?
5 MR. DAVIS: If you would please, sir.
6 STATEMENT OF JOE OKADA
7 MR. OKADA: Good morning, ladies and gentlemen.
8 My name is Joseph M. Okada, 0-k-a-d-a. I was asked to
9 come here as a private citizen avid wine drinker, to
10 voice some of my views. *
11 I received a copy of this proposed rulemaking
12 here, so I would like to make one general comment
13 and just a few specific comments on several of the
14 paragraphs in the ruling.
15 My general comment is that as far as the premimum
16 wines from California mostly, are concerned, it is
17i a very competitive market. The consumer is very
knowledgeable with a considerable amount of expertise,
18
and generally speaking, even with or without regulation,
19
the quality of wine sold will take care of itself.
20
The wines will stand or fall on their own merits.
21
I think it is in the so-called popular supermarket
22
brands of wines that the consumer needs the most
23
protection. He has no idea what he's drinking. He
24
can end up with a bad hangover.
25
1
With very costly promotion in the news media,
2
he is very apt to buy a bad wine and end up with damage
3
to the liver and bad headaches. That is my general
4
comment.
5
Now, I've made a few notes here on specific
6
paragraphs in here. I would like to go over them
7
very briefly.
a
On page one, I suppose, on the proposed rules,
9
column two, I think it is item three, where it says:
10
"Show the month and year of fill on the label." I don't
n
think it is really necessary to go to the extent of
12
indicating the month of bottle on the label. I think
13
a year is usually sufficient.
14
Then further down in column two: "If labeled with
15 a varietal name, 51 percent of the wine must be derived
16 from that variety of grape", I think this is bending
17 slightly to industry pressure. They have established
18 a 5i-percent number over the years, and I think it is
19 about time we raised this percentage figure.
20 Going to the next page, about two-thirds of the
21 way down, in the third paragraph it says: "In the case
22 of varietal 'seal' wine, a minimum varietal content of
23 85 percent, derived entirely from the labeled viticul-
24 tural area or vineyard, would be required... "
25 With regard to this paragraph, I should note that most
174
1 California wines contain a very high percentage of
2 varietal, anyhow. They strive in competition with their
3 fellow winemakers towards a very high percentage of
4 varietal. In fact, many producers go to the extent
5 of trying to produce a 100 percent varietal, even
6 at most, a well balanced character of the wine.
7 Further down, in the same column it says, in
8 the middle of the paragraph there: "In addition, the
9 winery which produced and bottled the wine would be
10 required to own or control the land on which the grapes
11 were grown. Now, in the case ofEstate bottled wines,
12 this may avoid confusion as to the source of the grapes
13 from which the wine was made. However, in California
as well as elsewhere, there are many grape producers
14
which do not produce their wines but sell their grapes
15
to bottlers,And although this rule would avoid some
16
confusion, I think it would sort of restrict freedom
17
of a bottler to buy wines from his customary producers.
18
I think he should be allowed a certain amount
19
of freedom, and buy from his customary producers, the
20
best grapes he feels he can get. But of course, you
21
still have to avoid shenanigans.
22
In paragraph two, the same page and the last
23 —
paragraph I mean, column two, the last paragraph it seems
24
there is going to be "a substantial change in the
25
. 175
T existing regulations regarding grape type designations.
2
I think this is a very good idea, and that the entire
3
qualifying percentage, 51 percent, of the varietal
4
grape be grown in the area covered by the appellation of
5 origin etcetera.
6
I believe, so far as the rest of the text here
7 is concerned, I generally am in agreement with all of
8 the changes. I am not a lawyer, so I am slightly con-
9 fused by the detailed wordings. However, I do agree
10 in principle, except for those few minor comments that
11 I made
12 Thank you.
13 MR. DAVIS. Thank you, Mr. Okada. I have one
14 question, if you would not mind answering. In the
15 estate bottling, you have indicated that you would favor
16 even where a vendor acquired his grapes from an
17 independent vineyard, that you would permit him to call
—
18 thisestatebottled wine, is this
19 MR. OKADA: I think in Europe, the word, Estate
20 bottling, means that a bottler can buy his grapes from a
—
21 wide area well, no, not exactly too wide an area.
22 If it is Beaujolais, it has to be within, the Beaujolais
23 area. But I will say, Beaujolais has considerable
24 freedom in buying his,grapes. And since it is a very
25 competitive industry, and the prestige of the bottler
176
t is at stake, in many cases, I think a certain amount
2 of freedom should be allowed, provided you can prevent
3 some shenaniganslike some people importing Algerian
4 grapes and blending that kind of a wine and calling it
5 something else.
S MR. DAVIS: Any other questions.
7 MR. HIGGINS: Just one. You suggested that the
3 varietal percentage of 51 percent was too low and that it
—
9 should be raised
10 MR. OKADA: I think the 51 percent has been
11 a customary standard out in California. And I think
12 the number has been around too long and of course, the
large supermarket wine producers want to maintain their
13
51 percent because it does allow them much more freedom.
14
And for bulk production and bulk bargainning, 51 percent
15
is a very convenient figure for the industry. But to
16
raise the standard, slightly, so the consumer knows
17
what he is buying, especially in the bulk lines, I believe
18
the percentage should be raised.
19 —
MR. HIGGINS: Do you have in mind any
20
MR. OKADA: No, I haven't. I mean, I am not that
21
much of an expert and of course, in a lot of the technology
22
of the wine industry, economics has to be considered.
23
MR. CHUPP: If we raise the varietal requirement
24
for these bulk, mass market wines, is that not going to
25
177
T raise the price?
2 MR. OKADA: I don't think so. The big time
3 operators out in California have good Congressmen working
4 for them. They have good cost-accounting, good marketing
5 practices and it is mostly the marketing that is selling
6 the wine rather than the quality.
7 But it is becoming competitive because like Callo,
a Italian Swiss Colony, you will notice, they are starting
to market a slightly better quality of wine because
9
this is competitive. It is like the three-pound box
10
n of detergent, it is the competitive size and the
level at which you would like to compete.
12
MR. CHUPP: You don't think the price would go up?
13
MR. OKADA: No, I don't think so because it's
14
economics. They are competitive, you see, at that
15
level, right now. There is a slightly better quality
16
of wine. Very competitive.
17
MR. HIGGINS: Assuming that perhaps the economics
18
did drive the price up of some wines, would you as
19
a consumer feel that you would be willing to pay that
20
additional price in order to get a higher or better
21
quality?
22
MR. OKADA: No, I wouldn't because I think as
23 —
far as California wine is concerned and I am one of
24 —
the bigger California wine buyers, myself.- the consumer
25
178
t
is becoming extremely knowledgeable on California wines.
2
You can't fool them anymore, except that the younger
3
generation who might, go to the supermarket and just
4
pick up a bottle for dinner. They are the gullible ones.
5
But for people like myself who have been buying California
6
wines for many years now, you can't fool the people who
7
are starting to know California wines. You can't fool
3
them anymore. They will not buy a wine that they think
9 is overpriced for the quality they get.
10 MR. DAVIS: Any other questions?
11 MR. DESSLER: Yes. Mr. Okada, you have prefaced
12 your remarks by saying that basically what is going
13 to dictate you as a consumer in buying the wine is
—
14 the quality of its
15 MR. OKADA: It's what you get for your money, right
16 MR. DESSLER: Right.
17 MR. OKADA: It is a very simple fact.
IS MR. DESSLER: Now, if the varietal content is
19 raised above the 51 percent, does it concern you as a
20 consumer whether or not the percentages are actually
21 listed on the label?
22 MR. OKADA: Not really. Like, take your Bordeaux
23 this is a blend. And under your new rules here, you may
24 not be able to import "'-.Bordeaux because it might have
25 as much as 20 to 25 percent of other than well, now,