What the ‘American’ wine label fight means for California’s wine industry

The bill is dead — for now. But the fight over what “American” means on a wine label is far from finished, and growers have a direct stake in what comes next.

Here’s a breakdown of where things stand, who is on which side and what the path forward looks like, based on reporting from The Sacramento Bee.

The labeling loophole in plain terms

• Under current federal rules, a wine can be labeled “American” if at least 75% of the grapes used to make it are grown in the United States.
• The other 25% can come from imported bulk wine blended into the finished product.
• By contrast, the state already requires any wine labeled “California” to be made from 100% California-grown product.
• For county-specific labels like Napa or Sonoma, the 75% rule applies.
• The disputed state bill would have required any wine sold as “American” to be made from winegrapes and wine that are 100% from the U.S.

The rare split inside the industry

• Three of California’s biggest wine industry groups — normally allies — are publicly at odds:
• The California Association of Winegrape Growers (Sacramento-based) wants the stricter 100% standard.
• Family Winemakers of California (Sacramento-based), which primarily represents small, family-owned and independent wineries, also backs the change.
• Wine Institute (Sacramento-based), whose board includes representatives of Gallo, Constellation, Delicato and The Wine Group, opposes it.
• The grapegrower association and Wine Institute could not recall another time in history when they have publicly disagreed on state legislation affecting the wine industry.
• The grapegrower group says there have been two prior instances of opposing views, but it stayed out of legislative deliberations then to preserve unity.

What the growers’ side is arguing

• Natalie Collins, president of the California Association of Winegrape Growers, framed the labeling change as a competitive fairness issue.
• “The large companies are wanting to continue to benefit from the American brand name without fully supporting the people behind it,” she said.
• Collins called it a “David and Goliath type of fight.”
• More than a decade ago, her association sought the same change at the federal level and was unsuccessful — opposed at the time by Wine Institute.
• GinaLisa Tamayo, board president of Family Winemakers of California, tied the issue to consumer trust:
• “Wine has won on its authenticity and connection to the land,” Tamayo, who is based in Santa Rosa, said. “We can’t let an outdated labeling loophole … get people to look elsewhere.”

What Wine Institute is arguing

• Tim Schmelzer, vice president of California state relations for Wine Institute, said there is no consumer transparency problem.
• “California wine labels are probably the most truth forward in the world,” Schmelzer said.
• Wine Institute’s position is that a new rule would add costs for companies and consumers and remove flexibility for winemakers.
• Schmelzer said imported bulk wine gives winemakers room to adapt as changing weather patterns affect crop production, and that blending also makes a product “unique and interesting.”
• “The nature of this business is that you have to pivot faster than a vine can grow and produce grapes,” Schmelzer said. “We are in a tough rebalancing period right now and feel it on all sides, growers and wineries alike.”

A Lodi grower-winemaker walks away from Wine Institute board

• Dave Phillips, a fifth-generation grapegrower and multigenerational winemaker whose Lodi winery produces half a million cases a year, resigned last month after 14 years on the Wine Institute board.
• He said he stepped down after the association ignored his request that it stay neutral on the bill.
• Phillips said he only learned six months ago that wines could be labeled American without 100% of the product coming from the U.S.
• He described seeing the financial hardship for the wine industry firsthand in Lodi.
• “We want to help our whole community,” Phillips said. “And importing cheap foreign wine and blending it into California (wine) … It is fine to do that, as long as it is labeled correctly, and the consumer sees that.”

The numbers behind the downturn

• Wine consumption has dipped to historic lows.
• Winegrapes are being left to rot on the vine and fields are being fallowed.
• Grapegrowers and winemakers are shutting down or being forced to change their products and marketing strategy.
• The wine and winegrape industries are billion-dollar enterprises in California, and the state produces the vast majority of American wine.
• The growers and Wine Institute also disagree on a basic question — whether bulk wine imports are rising or falling — with both citing different figures from bw166, a U.S. alcoholic beverage data provider.

How the bill moved — and where it stalled

• The state Assembly passed the American wine label bill 67-0, with some abstentions, last month.
• The bill was pulled from the state Senate committee agenda Tuesday, signaling it may not have had the votes to pass.
• The bill drew support from local wine associations and grapegrowers across California wine regions and from the California Farm Bureau.
• Assemblymembers Damon Connolly, D-San Rafael, and Rhodesia Ransom, D-Tracy, the co-authors of the bill, said in statements they will continue to advocate for the issue next year.

Who lobbied — and what they said

• Large wine companies including Constellation, Delicato, Gallo and The Wine Group — all with multiple representatives on Wine Institute’s board — hired lobbyists for work related to the bill, state lobbying disclosure records show.
• Gallo and The Wine Group together sell tens of millions of cases annually.
• Ross Buckley, the lobbyist hired by The Wine Group, Delicato and Constellation, said The Wine Group opposed the bill, but he is “not aware of any position” from his other clients.
• Wine and Spirits Wholesalers of California also did not support the legislation.

What happens next — at the state and federal level

• Collins said her association will continue to push for the bill in California and for a federal equivalent, arguing the state measure did not get a fair shake.
• The grapegrower association met with federal officials this month to discuss industry concerns including the American label and is working with wine associations in four other states on advocacy.
• Collins, on the broader stakes:
• “We are at the most challenging point that this industry has ever been at. And we can’t agree on the most basic foundational principle that American wine should mean American grapes. I think we have a lot of issues in front of us (since) we can’t agree on the most foundational piece to start rebuilding our industry.”
• Schmelzer said Wine Institute hopes to refocus on demand:
• “We hope that we can gather back together with our grower friends and work to address what we think is the real problem that we are facing right now: to increase demand for wine products. We think that will help lift everyone up.”