OLCC Proposes New Rules for Food Carts

The Oregon Liquor Control Commission (OLCC) is undertaking rulemaking that would impose new regulations on the service of alcohol at food carts and other outdoor areas throughout the state. The rules would distinguish between outdoor areas not abutting a licensed building (e.g., areas associated with food carts and food cart pods) and outdoor areas connected to a brick-and-mortar licensed premise.

Overall, the proposed rules would establish a clear licensing pathway for food cart applicants. OAR 845-005-0329 outlines the basis upon which the OLCC may refuse to issue a license, and OAR 845-006-0309 establishes the requirements a licensee must meet for alcohol service. While the proposed rules are fairly straightforward, some may criticize the rules for being too restrictive.

For example:

  • The outdoor area must qualify for a Number III minor posting. This posting requires that the designated drinking area not constitute a “drinking environment and drinking alcohol will never predominate.” This would be a more stringent minor posting than that required for outdoor areas adjacent to a physical licensed building. Food carts would not be allowed to have outdoor beer garden areas or environments similar to a winery tasting room. A solution to this issue would be to revise the proposed rule to allow a Number IV minor posting (“Minors Allowed During These Hours ___ to ___”) or a Number V minor posting (“Minors Allowed Only with Their Parent, Spouse or Domestic Partner Age 21 or over”) when authorized by the OLCC on a case-by-case basis.
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Federal Officials Mull Changes to Alcohol Label Approval Process

Alcohol and Tobacco Tax and Trade Bureau (TTB) official Susan Evans, the Executive Liaison for State and Industry Matters, talked about ways to streamline the federal label approval process at the June 2013 National Conference of State Liquor Administrators (NCSLA) that I attended in Honolulu. Speaking on a panel, she said that the TTB has experienced reduced staffing and declining budgets, which have slowed down two of its major functions: permitting and approving labels. 

According to Ms. Evans, nearly 25,000 permittees submit certificate of label approvals (COLAs) to TTB . Last year TTB received over 145,000 COLA applications. In the last two years, TTB has imposed fewer restrictions and qualifications, updated the COLA form to allow changes that may be made to labels without TTB approval, and established a virtual file room for processing paper applications electronically. 

In addition, TTB recently reviewed the label approval program and concluded the following:

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Sales Limit Increase Could Give Washington State Craft Distilleries More Momentum in the Retail Market

This week, a bill passed the Washington legislature that will allow a craft distillery to sell more of its product to customers visiting its distillery.

House Bill 1149 has been sent to Governor Inslee to sign in to law, amending RCW 66.24.145 to allow a craft distillery to sell a maximum of three liters of spirits of its own production per person per day for off-premise consumption. The prior limit was two liters per person per day. Importantly, craft distilleries that opt to sell spirits from their premises must be aware that they are required to comply with the applicable laws that relate to retail liquor licensees, such as responsible alcohol sales, as well as the state and federal requirements that apply to distilleries.

Craft distilleries are distinguished from larger distilleries most notably by the amount of spirits produced—a maximum of 60,000 proof gallons per year (WAC 314-28-050)—and the requirement that a minimum of 50% of Washington-grown raw materials be used for production (WAC 314-28-060). The craft distillery industry has experienced steadfast growth since the Washington State Liquor Control Board implemented the license less than three years ago. The passage of 1149 is a clear indication of the need for refinement of the laws that regulate this growing industry. Craft distilleries have the potential to gain a stronger presence in the liquor market as more people look to them directly for unique, local spirits.

As Wine Industry Evolves, Local Regulation Remains King

Litigation concerning the direct shipment of wine has garnered a significant amount of attention in the years since the United States Supreme Court’s seminal decision in Granholm v. Heald. Generally speaking, these disputes have played out in the federal courts, far removed from the typical family winery.

Although direct shipment will remain an important issue both for wineries and for the attorneys who represent them—indeed, it is one of the topics covered in Stoel Rives’ Law of Wine treatise—a winery’s long-term financial success may be just as likely to hinge on the outcomes of lower-profile controversies litigated in front of local government bodies. Depending on the state and locality, these local governments may have the power to prohibit the construction of new tasting rooms or restaurants—a growing source of revenue for many wineries1 —or to regulate the number and character of marketing events held by a winery.

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TTB Addresses Label Approval Issues

The Alcohol and Tobacco Tax and Trade Bureau (TTB) has experienced some difficult times in the last several years due to reduced staffing and declining budgets. These factors have made it difficult for the agency to accomplish two of its major functions; Permitting and Approving Labels.

TTB has attempted to address the Label Approval issue by instituting two recent changes. First in April 2011, the agency announced that would discontinue evaluating labels for purposes of ensuring that the labels conform to all applicable legibility and type size requirements (including characters per inch and contrasting background). As always, the responsible industry member is obligated to ensure proper labeling for their products and this new procedure ensures new label approvals will contain a statement to that effect.

Then on July 5, 2012, TTB published a revised version of TTB Form 5100.31, Application for and Certification/Exemption of Label/Bottle Approval, also known as a certificate of label approval or COLA. The most significant change made was to expand the list of items that may be changed on an alcohol beverage label without TTB approval. Highlights of the new revisions include the following. Holders of approved labels may:

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Upcoming Comment Deadline and Public Hearing on Washington State Liquor Control Board's Administrative Code Amendments to Implement Initiative 1183

Stephanie Meier and Elaine Albrich

The Washington State Liquor Control Board is proposing additional code amendments to further implement Ballot Initiative 1183. The WSLCB encourages public input and requests that initial comments be received by June 27, 2012. A public hearing will be held on the draft code amendments Wednesday, June 27, 2012 at 10 am. The changes, among other things, add language to address the sale of spirits and identify the sources from which retail licensees may purchase beer, wine and spirits. The rules also add new language requiring wine distributors to sell and deliver product from their licensed premises and clarify that wine importers cannot sell to retailers.

As you may recall, WSLCB adopted emergency rules on December 7, 2011 and April 4, 2012, and adopted permanent rules on May 30, 2012 (copies can be found here). A group representing retailers has filed a petition for judicial review of these rules, arguing that WSLCB acted outside its authority in adopting these rules.

TTB Publishes Notice of Rulemaking for Inwood Valley AVA

On December 5, 2011, the TTB published a Notice of Proposed Rulemaking (Notice No. 125) regarding the establishment of the Inwood Valley Viticultural Area in Shasta, California. If established, the new AVA would consist of a 28,000 acre area, the vast majority of which is currently not dedicated to, or known for, vineyards. The TTB invites comments on the proposed rulemaking, with any comments due on or before February 3, 2012. A full version of the Notice and the documents relating to the underlying Petition can be found here.

TTB Rules to Expand Sonoma AVAs

On Wednesday November 16, the TTB published a ruling (T.D. TTB-97, available here) amending the federal definition of the Russian River Valley viticultural area and the Northern Sonoma viticultural area, by expanding each. The action first began in August of 2008 when Gallo Family Vineyards submitted a petition for the amendment. After receiving numerous comments both for and against, the TTB ruled to expand the Russian River Valley viticultural area south and southeast by 14,044 acres to 169,029 acres, an increase of 9%. This expansion will include land just west of Rohnert Park and Cotati.

The decision will also expand the Northern Sonoma viticultural area to include the entirety of the Russian River Valley viticultural area. The expansion will add 44,244 acres to the Northern Sonoma area, bringing its total to 394,088 acres, also an increase of 9%.

The TTB specifically noted in the ruling that the expansion will not affect currently approved wine labels but will allow winemakers in the expanded area to utilize the two viticultural designations not previously available to them.

The ruling goes into effect on December 16, 2011.

UC Davis Holds Wine Law Conference

I recently attended the UC Davis Wine Law Conference, held at the UC Davis School of Law. The conference's main focus was intellectual property and European imports/exports, as well as the affects of recent changes in the European Union rules regarding wine IP, with a specific focus on Italy. Panelists also discussed the affects of international beverage counterfeiting and how multinational parties can and should reach consensus on trade rules. The discussions were frank, sometimes even contentious, but overall very productive. The conference drew numerous high-level attendees, including members of the legal community, industry stakeholders, and regulatory agencies from both the United States and abroad.   

TTB Adopts New, Softer Rules for AVAs

 The Alcohol and Tobacco Tax and Trade Bureau (TTB) has, in a final rule/treasury decision (available here), issued new and revised regulations with respect to three formerly confusing areas pertaining to American Viticultural Areas (AVAs): brand names that conflict with AVA designations, the AVA application process, and the existence of smaller AVAs inside currently existing or proposed AVAs, aka "nested" AVAs.

The new rules are considered less stringent than were originally proposed by the agency. The originally proposed rules were widely rejected by members of the wine industry and were subject to a resolution of opposition by the California legislature, authored by two lawmakers from the Napa Valley.

 Brand Names

The TTB had originally proposed adding a "grandfather" clause for brand names that had received the proper Certification of Label Approval (COLA) but contained the name of a potential or recently established AVA. After receiving comments, the TTB reversed its proposed rules and did not adopt a standard grandfather clause, believing that its current "case-by-case" analysis and flexibility of remedies was preferable.

 Establishment of AVAs

The new/revised rule codifies long-standing agency practice and clarifies the process and evidence required in petitioning for a new AVA. The new section 9.12 (27 Code of Federal Regulations, Part 9) sets forth exact requirements, which include very distinct name and boundary evidence, distinguishing features, and detailed maps. The new section 9.13 also spells out in greater detail the actual rule-making process of applying for an AVA. In addition, the TTB stated that while "sufficient viticulture" must exist in order to establish an AVA, it would not establish a rule identifying a minimum acreage site or vineyard density.

"Nested" AVAs

The new Part 9 also directly deals with the issue of smaller AVAs surrounded by larger AVAs or "nested" AVAs. There had been a proposal to prospectively prohibit the creation of "nested" AVAs but the TTB rejected an outright ban and instead set forth regulations regarding evidentiary proof for their establishment. Section 9.12(b) states that when a petitioner is requesting the creation of a smaller AVA within an already existing larger AVA or the creation of a larger AVA that would envelop the smaller AVA, the petitioner must state, in the petition itself, why the proposed AVA is "sufficiently distinct" from the existing one and must explain why the "establishment of the [new] AVA is acceptable."

The TTB also declined to implement standing regulations regarding which AVA a winery in a "nested" AVA could use on its labels, concluding that its current "case-by-case" basis was better than a standing rule.

This post was written in collaboration with Lee Smith, a partner in Stoel’s Sacramento office.

 

 

Conjunctive Labeling Comes to Sonoma County

               With the turn of the calendar and after nearly a year of political wrangling, conjunctive labeling will be the norm for Sonoma County wineries beginning in 2014. Passed by unanimous vote in both the state assembly and senate in August and signed by Governor Schwartzenegger at the end of September, AB 1798 will require wineries using the name of any of the 13 recognized American Viticulture Areas (AVA) within Sonoma County on their labels to include “Sonoma County” as well. The bill is not retroactive as it applies only to wines bottled after January 1, 2014. Failure to comply is considered a misdemeanor and subjects the violator to possible revocation of their ABC license. To achieve compliance, it will be necessary to file for and receive a new Certificate of Label Approval (COLA) from the TTB for those labels already approved.

Response to the new requirements has been mixed. Pushed heavily by the Sonoma County Winegrape Commission and the Sonoma County Vintners, Nick Frey, the Commission’s president, stated, “In this increasingly competitive wine market, building awareness for Sonoma County and the wine regions within the county is critical to Sonoma County grape growers and the wineries they supply. AB 1798 will ensure that consumers recognize every bottle of wine produced from Sonoma County grapes.” However, several large, well-known wine producers in the region see the legislation as diluting their already well-established brands, in addition to the added cost and confusion of including “Sonoma County” on an often already crowded label.

Some of the better known of Sonoma’s AVAs are the Russian River Valley, Sonoma Coast and Dry Creek Valley. California requires conjunctive labeling for three other viticulture areas: Napa Valley, Lodi, and Paso Robles.

New California Law Streamlines Instructional Tasting Licenses

          On the list of California laws affecting the wine industry in the New Year is AB 605 – the Instructional Tasting Events License. Introduced in 2009 and signed into law September 23, 2010, AB 605 adds to the Business and Professions Code sections 23396.6 and 25503.56. The additions allow the ABC to issue a single “instructional tasting license” to any holder of an off-sale retail license, thus doing away with the need for retailers/suppliers to get a permit for every “instructional tasting” event. Retailers granted an instructional tasting license would be allowed to hold an “event for consumers on the subject of wine, beer, or distilled spirits, including, but not limited to, the history, nature, values, and characteristics of wine, beer, or distilled spirits, and the methods of presenting and serving wine, beer, or distilled spirits.” These events may include the consumption of alcohol.

          The retailers may not conduct the events themselves. However, they may invite “authorized licensees” (i.e., holders of manufacturing or supply licenses) to conduct them. The retailer may hold the event if, among other things, the authorized license holder is unable to attend and the event has been advertised and scheduled. In addition, the retailer can’t supply the alcohol for the event; it must be supplied by the authorized licensees or purchased from the retailer by the authorized licensees at the going rate.

          The events must be located at a cordoned-off section of the retailer’s premises. The law also sets stringent restrictions on servers and attendees (no one under 21), types of alcohol (wine, spirits, or beer but no combinations), charge (can’t have one), serving amount (one ounce for wine), and event times (between 10 am and 9 pm).

          The new licenses are not permitted to be issued to any off-sale licensee at a location where gasoline is sold, unless the licensee operates a “fully-enclosed” off-sale retail space of at least 10,000 square feet (i.e., Costco, Walmart, Safeway, etc.). Nor can they be issued to licensees at locations “with a total of less than 5,000 square feet of interior retail space” unless yearly gross sales of alcohol at that location are at least 75% of total gross sales (i.e., liquor stores).

          The fee for the new license is $300. Violations of the age limit are a misdemeanor and carry a penalty of $200 (for both the retailer and the minor). A violation of any section carries a penalty of suspension of the instructional license for the retailer and suspension of the privilege of conducting instructional tasting events for the authorized licensee for a period of six months to a year.

Oregon Temporarily Bans "Alcopop"

Following actions by the FDA, the TTB, as well as several states, the Oregon Liquor Control Commission (OLCC) recently announced a temporary ban on the sale of caffeinated alcoholic beverages within the state's borders. The action, taken during a November 20th special meeting on the issue, will last until May 18, 2011, during which time the OLCC will move to make the ban permanent. The ban requires sales of "Alcopop" cease immediately and all merchandise be removed from store shelves. According to the OLCC press release, failure to comply would constitute a "category two" violation, punishment being a mandatory 30-day suspension of the offenders liquor license.

The move was applauded by Oregon Gov. Ted Kulongoski, who stated he "...applaud[ed] the OLCC for taking the very necessary step of halting access to these dangerous beverages."

FDA Issues Warning Letters to Manufacturers of Caffeinated Alcoholic Beverages

In an update to an earlier blog post, the FDA issued warning letters today to four manufacturers of caffeinated alcoholic beverages. The FDA stated in the letters that caffeine added to malt alcoholic beverages was an “unsafe food additive ” and thus, such products are in violation of the Federal Food, Drug, and Cosmetic Act (“FFDCA”).

Recipients of the letters, which included Charge Beverages Corp.; New Century Brewing Co., LLC; Phusion Projects, LLC (d/b/a Drink Four Brewing Co.); and United Brands Company Inc., have 15 days from receipt of the letter to respond to the FDA with their respective mitigation measures. Those companies may also challenge the ruling that their particular products are in violation. Failure to comply could result in enforcement actions by the FDA, including seizure of merchandize.

The FDA’s move was considered an almost certainty given the myriad of recent actions taken by a number of states to curb or ban the sale of caffeinated alcoholic beverages.

FDA May Issue Warning on Alcoholic Energy Drinks; States Move to Ban "Blackout in a Can"

Amidst rising incidences of hospitalizations in college and teenage drinkers linked to consumption of alcoholic energy drinks, the Washington State Liquor Control Board banned their sale effective tomorrow, November 18, 2010. The move came on the heels of a request by Washington Governor Christine Gregoire, whose office stated in a November 10 press release that they were “…particularly concerned that these drinks tend to target young people.”

The Liquor Control Board placed the ban in an emergency ruling which will last for 120 days. During that time, the Liquor Control Board will move to make the ban permanent. Liquor Control Board Chairperson Sharon Foster stated, “[t]he Board is acting in the public safety…the Board is acting now to ensure these products do not contribute to a tragedy before the Food and Drug Administration or Legislature can act.” Earlier this year, the Liquor Control Board had lobbied for State legislative action to ban the sale of caffeinated malt beverages in Washington but those efforts were unsuccessful. A list of particular products affected by the Liquor Control Board’s ruling can be seen here.

 

Washington’s ban is merely the most recent action in an ever increasing movement by states to control the sale of caffeinated alcoholic beverages. The Oregon Liquor Control Commission Chairman stated in an October press release that, “…alcoholic energy drinks should be removed from the market until further research isdone.”  The OLCC also stated that it is currently looking into possible regulatory efforts with the state legislature and is reaching out to community organizations to warn them of the dangers of the beverages.

 

While California’s Department of Alcoholic Beverage Control has not yet made a statement regarding the drinks, Connecticut announced Monday that it had reached agreements with state distributors to voluntarily stop shipments of caffeinated alcoholic beverages starting December 10, 2010. Michigan has banned one particular brand of caffeinated alcoholic beverage, Four Loko. New York has reached an agreement with Phusion Projects LLC, the manufacturer of Four Loko, to stop sales in the state until “…emerging science, regulatory developments or other relevant changes in circumstances arise." Utah and Oklahoma have followed Washington’s lead in banning the sale of any brands altogether. Massachusetts’ Alcoholic Beverage Control Commission stated that it will file an emergency ruling, similar to Washington’s, on Monday, November 22, 2010.

 

At the federal level, the Food and Drug Administration (“FDA”) is currently reviewing whether caffeine is a safe additive to alcoholic beverages. A negative finding would essentially ban the sale of caffeinated alcoholic beverages nationwide. It is widely assumed the FDA will, in fact, reach a negative finding. NY Senator Chuck Schumer, who has been lobbying for a ban on the drinks, stated that the FDA decision “…should be the nail in the coffin of these dangerous and toxic drinks.” The FDA decision is expected within the week.

Bernie Kipp at Great American Distiller's Festival

Craft distillers from coast to coast attended the 6th Annual Great American Distiller’s Festival (GADF) on October 23 and 24, 2010 at the Tiffany Center in NW Portland. 38 separate distilleries poured more than 70 gins, vodkas, whiskey’s and rums in a celebration of all things “spirited.”

Special events included seminars for distillers and tours of Portland distilleries. Seminar presenters included Bernie Kipp Alcohol Compliance Advisor for Stoel Rives LLP; Japanese Whiskey distiller Yuri Kato, and former master distiller for Maker’s Mark, Dave Pickerell.

GADF hosted the largest number of distillers and attendees to date, reflecting the growth of craft distilling in the United States and Oregon. Oregon is an established hotbed for craft breweries and wineries, and craft spirits are quickly becoming the third leg of the fermentation stool. Oregon boasts nearly two dozen distilleries, with at least eight in Portland. Several Portland distillleries have made “distillery row” in South East Portland official by forming a nonprofit organization and offering tours of each distillery at particular hours.

Audit Supports More Liquor Permits for Utah

A recent legislative audit made several strong recommendations for reforming Utah’s liquor  laws, in particular the quota system for granting alcohol permits. The audit echoes reports that the current shortage of alcohol permits is stifling economic development and does not reflect the state’s changing population.

Utah is in the small minority of control states that grant liquor permits based on population. Of the states polled, the audit commission found that only two other states, Pennsylvania and Idaho, use a state-wide quota for liquor permits. Idaho allows one permit per 1,500 people for clubs and restaurants and has no quota for beer and wine.  Pennsylvania allows one permit per 3,000 people regardless of permit type. In contrast, Utah allows one permit per 7,850 people for clubs and one permit per 5,200 for restaurants. 

According to the audit, quota numbers have not changed since 1990. In the meantime, the state’s population has increased by 22 percent with significant demographic changes. For instance, the percentage of the state’s population that were reported to be members of the Church of Jesus Christ of Latter Day Saints, whose observant members do not consume alcohol, has shrunk from 70% in 1989 to 58% in 2009. Further, alcohol consumption rose 54% from 2001 to 2009. The audit also reports an increase in the number of people who are eating out. These changes make the state appealing to restaurant and bar development. Many restaurateurs, including large chains, have, however, expressed reluctance to develop businesses in Utah given the uncertainty over obtaining a liquor permit. 

The audit recommends increasing the number of overall liquor permits, and in particular restaurant permits. As previously reported, a bill to allow current permit holders to sell their alcohol permits is being considered for the next legislative session, which begins in January. Another proposal would allow resorts to obtain one license to cover the range of alcohol services provided rather than the current system that requires a separate permit for each service. This could free up numerous additional permits; one resort alone reportedly holds 17 permits to cover its restaurants, bars and other services. 

In response, the Executive Director of the Utah Department of Alcoholic Beverage Control suporrted  the audit’s recommendations. The Utah Restaurant Association and Utah Hospitality Association also embrace such reforms. It is still unclear, however, whether the state legislature will support any of the recommended reforms. Stay tuned for updates.  

Washington RESTAURANTS: Proposed Changes to Rules

WSLCB just issued a Notice of Rule Making that will amend rules that apply to retail licensees.  While some of the proposed changes are organizational in nature – moving provisions from one chapter to another – there are a few key changes that restaurants should take note of.  These changes will likely raise questions that will need to be resolved during the rulemaking process.  The following reference the proposed text sections:

  • The provision that allows restaurants to exclude minors from the premises during certain periods is removed – does this mean that minors must either always or never be excluded from a premises/area? WAC 314-02-030
  • The description of “premises” for on-premises retailers (restaurant, bar, etc) includes the building in which the retail business is located – does this mean that if a restaurant is located in mall, the entire mall is the retail premises? WAC 314-02-010(16)
  • The number of complete meals a spirits, beer and wine restaurant licensee must make available increases from four (4) to eight (8). WAC 314-05-035(1)
  • Outside of the mandatory food service hours, a spirits, beer and wine restaurant must have certain foods available, and this list is expanded to include appetizers, salads, soups, and pizza. WAC 314-02-010(2), (11); 314-02-035
  • WSLCB clarifies that all meals must be prepared on-site – no reheated or pre-cooked meals are allowed. WAC 314-02-035(1)(b)
  • A “complete meal” can include hamburgers, sandwiches, salads, or fry orders (those are not included under the current rule)
  • Beer and wine restaurants are required to operate five hours a day, five days a week (currently, no hourly requirements)

WSLCB is currently taking comments on the proposed rules.  It is important to read these carefully and respond with any questions or concerns, as there can be implications for the industry that are not immediately recognized by the drafters.  WSLCB welcomes the comments, and is open to revisions that are supported by law.  You can find the details on how to respond here – comments are due by November 10, 2010.  A public hearing will then be set, where you can voice any concerns in person. 

 

If you have any questions about what these or other proposed rule changes can mean for your business, feel free to contact one of our alcohol beverage law professionals.

Variations of Organic Labeling

Figuring out what information must be on your wine label can be tedious.  Adding terms like "organic" or "sustainably-grown" can be even more challenging.  Extra steps are required for adding organic certifications or claims to a wine label, although the regulation of such claims under the TTB COLA process has been made more clear with the Memorandum of Understanding between the TTB and the USDA concerning organic labeling and adverting.  The MOU clarifies and delineates the enforcement responsibilities of each agency with respect to labeling and advertising of alcohol beverages produced under the Organic Foods Production Act of 1990 (OFPA). 

The USDA has authority over domestic and imported agricultural products to be sold, labeled, or represented, as organically produced.  Under OFPA, the USDA has established the National Organic Program (NOP).  Agricultural products that are sold or labeled as organically produced must be produced and handled in accordance with NOP.  Any use of the term "organic" on a wine label or in adverting of wine must comply with the USDA's NOP regulations.  Now, with the adoption of the MOU, it is clear that TTB has the regulatory authority to determine whether proposed labels are consistent with NOP. 

The Advertising Labeling and Formulation Division (ALFD) of the TTB has guidance for organic labeling applicants.  The guidelines provide a step-by-step process of what is required to obtain label approval, including the need for proof of USDA-accredited certifying agent (ACA) preview, a certification statement, a sulfite statement, an ingredient statement, the USDA seal, and so on.  The guidelines also contain an organic label quick reference sheet that explains the requirements for the various organic claims, like "100 percent organic," "organic," or "made with organic (specify ingredient)."   Additional TTB guidelines on variations of "organic" labeling are available at www.ttb.gov/pdf/wine.pdf

For fun, I looked at four different bottles of wine that made some claims for "green production."  The first was a NSA Organic, USDA certified wine from the Columbia Valley.  The bottle was blazed with the "organic" nature of the wine, from the foil marked with "NSA Organic" to the "certified organic vineyard" on the "back" label.  The USDA Organic stamp was also featured.  Comparatively, an Oregon pinot from Eola-Amity Hills was simply marked with a small "made with organic grapes" statement and certified organic by Oregon Tilth.  Then there was another wine from Columbia Valley that, while not having any "organic" claim, was described as a "wine of sustainable and environmentally friendly farming."  Finally, the fourth was an Austrian wine certified "Demeter,"  a biodynamics certification.  However, notably many wines that are known to value biodynamic or sustainable farming practices do not make such claims on their labels.  Recognizably, this allows for more flexibility and avoids the extra steps of having to prove organic label claims.   

 

Oregon Homebrewers Stymied by New Interpretation of Law

By Guest Blogger, Summer Associate

The Oregon Liquor Control Commission and the Oregon Department of Justice recently opined that, under a post-prohibition-era law, homebrewed beer and homemade wine must be consumed at home. This opinion, reportedly in response to a question regarding the permissibility of public competitions involving homebrewed beer, is in effect a reversal of the OLCC’s previous policy permitting public competitions and understandably has caused great concern within the Oregon home brewing community. One immediate effect has been the cancellation of the amateur beer and wine competitions at the Oregon State Fair after more than 20 years of such contests.

The law in question, ORS § 471.403(1), reads

 

No person shall brew, ferment, distill, blend or rectify any alcoholic liquor unless licensed so to do by the Oregon Liquor Control Commission. However, the Liquor Control Act does not apply to the making or keeping of naturally fermented wines and fruit juices or beer in the home, for home consumption and not for sale.

 

Apparently, the OLCC and DOJ determined that “for home consumption” does not include public tastings and competitions, and therefore any out-of-home consumption is subject to OLCC control.

 

However, a few questions remain. First, what will the Oregon courts say that the statute means? The OLCC and DOJ have changed their view of the law and may therefore choose to enforce its provisions more broadly, but in the absence of a new administrative rule codifying the revised interpretation, the courts may not come to the same conclusion as OLCC. Second, specifically which provision of the Act would a homebrewer violate by participating in a competition? Arguably, a homebrewer would violate ORS § 471.405(2), which reads

 

No person shall purchase, possess, transport or import, except for sacramental purposes, an alcoholic beverage unless it is procured from or through the Oregon Liquor Control Commission, except as provided otherwise in the Liquor Control Act.

 

That said, because ORS § 471.403(1) permits the “keeping” of homebrewed beer in connection with home consumption, it is not clear that participating in a public competition amounts to more than this.

 

In the meantime, some homebrewers have organized the Oregon Homebrewers Alliance to urge the Oregon Legislature to update the law during its next session in January 2011. Reportedly, Rep. Mike Schaufler, D-Happy Valley, and Sen. Floyd Prozanski, D-Eugene are working on a draft bill that would change the law to explicitly allow home brewers and winemakers to take their products outside their homes. Stay tuned.

States that Regulate . . . and Control

Taxes and One-Stop-Shopping

As we all know, Washington is not the only state that controls the sale and distribution of alcohol. Each of the 19 (1) “control states” have different practices that distinguish them. Here, and in future posts under “States that Regulate . . . and Control” we will provide bits of information on the control states and how they operate.

  • IDAHO – What is distinguishing Idaho from other control states right now? TAXES. There has reportedly been an influx of Washington customers who are traveling to Idaho to avoid paying the higher liquor taxes in Washington. This has long been a customary practice in the Northeast, where a shorter commute can make a trip across state lines worth the few dollars of savings. Here in Washington, however, only the eastern-most residents benefit.
  • PENNSYLVANIA – With the current drive to privatize in Washington, it is interesting to remember that the state could always impose more control: the Pennsylvania Liquor Control Board recently rolled out its new wine kiosks, where one must scan an ID, pose for the video camera, and take a breathalyzer before purchasing wine from an automated machine. In Pennsylvania, wine and liquor are sold from state stores, so this provides consumers the “opportunity” to buy wine in a grocery store – one stop shopping at its best?

(1) Alcohol is regulated at the county level in Maryland; Worcester and Montgomery counties both control alcohol sales.