That Stink is Coming From Napa Valley

Let me say right off the bat, I think the Napa Valley Vintners are a remarkable trade association that has done a better job than any other such association in representing the wineries that make up their organization. I’ve done work for the Napa Valley Vintners too. And I know the folks over there as well as numerous members.

That said, the NVV’s latest attempt to demonize Calistoga Cellars STINKS to high heaven!

A couple hours ago I received a press release from NVV that contained a position statement the Vintners took late last year in the controversy surrounding place name and brand names. In that document the Napa Valley Vintners accused Calistoga Cellars of marketing and selling wines with "purposefully misleading labels, leading consumers to believe their wines are from grapes grown in certain appellations or winemaking regions, when they are not."

I’m the last person who would criticize an advocate for using strong rhetoric. I like strong rhetoric. But strong rhetoric does require one small element to work: IT MUST BE TRUE. The Napa Valley Vintners rhetoric in their position statement simply isn’t true. And you have to wonder, what kind of case do they have to make when they choose not to rely on the truth.

The facts of this case can be found in THIS BLOG POST.

But to note the facts of this controversy again:

1. Calistoga Cellars has been using its brand name since 1998.

2. Napa Valley Vintners did not lodge a protest when Calistoga Cellars was founded or when it first made wine from Napa Valley grapes the didn’t happen to be grown in or around the town of Calistoga

3. In 1998 there was no legal requirement that demanded Calistoga Cellars make wine only from Calistoga-grown grapes in order to use that brand name.

4. In 1998 there wasn’t even a legally defined growing region called "Calistoga", which I suppose there would have been had the region possessed anything like the kind of viticultural significance that resulted in other areas of Napa Valley receiving American Viticultural Area status.

5. In 2005 a petition was submitted to create an official growing region called "Calistoga"

6. If the new growing region (called an AVA) is approved, it would force Calistoga Cellars to change its business model or its name. The newly created region would force any winery using "Calistoga" in its name to source 85% of its grapes from this new region.

7. The Federal department that oversees AVAs, the TTB, suggested that wineries using the "Calistoga" name in their brand before March 31, 2005, be grandfathered in and allowed to continue making wine that doesn’t meet the new requirements that were also not in place when Calistoga Cellars was founded.

The Napa Valley Vintners have put their full weight behind the idea that Calistoga Cellars should be stripped of the rights it has had for a decade, and with no compensation whatsoever. They’ve been able to get a resolution through the California Senate urging that the TTB’s wise compromise on the grandfathering of Calistoga Cellars be rejected. The Napa Valley Board of Supervisors sent a letter on behalf of the Napa Valley Vintners to the TTB urging that the TTB’s wise compromise on the grandfathering of Calistoga Cellars be rejected.

This issue has come up before with wineries in Napa Valley. Wineries with "Stag’s Leap" and "Spring Mountain" in their names were named after areas inside Napa Valley. To avoid any problems when these areas became AVAs just like is being proposed for Calistoga, they added the word "District" to the name of the AVAs a la "Stag’s Leap District" and "Spring Mountain District". The owner of Calistoga Cellars, sagely, suggested they do the same with "Calistoga", making the new AVA "Calistoga District" and thereby solving this controversy in the same way other controversies of the type have been settle.

The vintners rejected this proposal. Why? Why is this solution good for some wineries and regions in Napa Valley but not for all of them? Adding "District" to the proposed new name of the Calistoga AVA is the proper way to deal with this issue. It was done in Stag’s Leap and with Spring Mountain. If Napa Valley Vintners is gong to demand this solution not be applied to this controversy, then they should have the cajones to take a consistent and principled stand by demanding that Spring Mountain Winery and the two "Stags Leap" wineries only use grapes from those regions in their wines. Think they will? I don’t.

Instead, the Napa Valley Vintners have adopted an unprincipled, FU approach to the problem, telling Calistoga Cellars essentially to do one of the following very costly things:

1. Change the business plan you’ve had in place for a decade and that no one objected to early on and now only buy grapes from within the area planned to be called "Calistoga".

2. Go to the expense of changing the name of your winery all together, a choice that could easily kill any number of wineries were they forced to do the same

3. Start an entirely new brand for those wines that, though they are made from Napa Valley grapes, aren’t made from Calistoga grapes.


Little Calistoga Cellars has hired a Washington, D.C.-based PR firm to make their case to the TTB in Washington. I hope they win their case going way. I wish they’d have hired Wark Communications to carry out a communications campaign aimed at  the wine industry. THAT would have been fun if only because one rarely has the opportunity to take ground so high that everyone else looks like snakes when from your vantage point and its so easy to offer a hand to anyone who wants to look at the issue from your higher vantage point.

There are not very many people standing up for Calistoga Cellars, a company that might be in the process of being bent over so hard by the wine industry that they won’t feel a thing for a year. When did principles go by the wayside at trade organizations? When did the Napa Valley Vintners decide to take their cues on how to act from the likes of the Wine & Spirit Wholesalers Association, The Swift Boaters and Ann Coulter?

Here’s the principle that should be adopted:

You don’t wait ten years after a winery has been authorized to use a brand name to rip that brand name away from them. Whether it was right or wrong to let a winery use a place name in their brand name, the objection that comes ten years after the brand name is granted comes ten years too late. And before stripping away the brand name that was applied for in good faith and granted in good faith, you look for other alternatives to fix the problem. And if you choose not to take this principled route, then you compensate the people who you are purposely trying to ruin and drive out of business for the benefit of others.

16 Responses

  1. David Cole - June 12, 2008

    Does this really surprise you? I think NOT! Napa Valley Vintner’s have become such babies, whiner’s and hater’s! They act like they make the only great wine in California. Again, I think, NOT!
    You don’t force someone to do this without compensation! The “district” is the right and consistent thing to do!
    I am hoping they win as well, in America we love an underdog!

  2. Steve Heimoff - June 13, 2008

    Tom, I’m with NVV on this one, although I think you have argued the opposing case with clarity and passion. However, in your post you overlooked the NVV’s other complaint, which is with the TTB’s proposed Notice # 78. That rule, it seems to me, would place an almost insurmountable burden on petitioners for “nested” AVAs such as the proposed Calistoga. It would require them to prove that their new AVAs do not suffer from any “apparent inconsistency” — a very subjective criterion, and one I would not want to be subjected to. How do you prove that a proposal does not have “apparent inconsistencies”?

  3. Tom Wark - June 13, 2008

    I see the Notice #78 as nearly disconnected from #77.
    That said, the TTB has a point. If an AVA is supposed to offer unique qualities that justifies its existence, then what does the idea of a nested AVA inside a larger AVA say about the larger AVA. Clearly it says that those characteristics of the larger AVA are not the consistent and unique characteristics they are claimed to be.
    Seems to me that those who insist that nested AVAs are legitimate want to play both sides of the street. Either “Napa Valley” is unique and “Calistoga” is of that uniqueness, or Calistoga is unique from Napa Valley, which in turn would suggest that the alleged uniqueness of Napa Valley is not really unique.

  4. Mark Finley - June 13, 2008

    Getting a little political there, aren’t you? Least you could do is throw in Michael Moore and the 100 Year War Accusers to balance it out a bit.

  5. Bradley - June 13, 2008

    Excellent piece, Tom. No matter how this issue plays out in Calistoga, it should serve as a warning for other wine regions where rapid growth and overlapping jurisdictions collide with the interests of winery operations. It doesn’t take too much imagination to see that happening around my neighbourhood where ‘GIs’ (geographical indicators) are a hot topic.
    I have to side with Calistoga Cellars. The decade between events can’t be ignored. Compensate them fairly or leave them alone.

  6. Morton Leslie - June 13, 2008

    The issue of appellations and sub-appellation is not as simple as you suggest. The Vintner’s have been consistent, you are just unaware of what went on in the 1980’s and has happened since. The issue nearly tore the association apart and was such a pivotal, heavily publicized issue that someone starting a winery in 1998 cannot claim ignorance to the fact that you proceed at your own risk if you use a regional name that is certain to become a sub-appellation. Grand fathering happened when this issue was resolved in the 1980’s. Calistoga Cellars would have a much better argument if they existed when grandfathering took place. Instead they came in after the grandfathering and intentionally capitalized on a regional name (though not official at the time. They are now claiming ignorance as to the risk they took. Saint Helena, Oakville, Rutherford, Yountville and Calistoga sub-appellations have all been in play for over two decades.
    Wineries with Stags Leap in their names were grandfathered as was Spring Mountain Vineyards. Technically, because the latter winery changed its name to Spring Mountain Vineyard (singular)it is not grandfathered. This was not an issue when the district was created in the 1990’s because their grape source is entirely from the estate within the Spring Mountain District.
    This is exactly what should be expected of Calistoga Cellars.

  7. Tom Wark - June 13, 2008

    ” The issue nearly tore the association apart and was such a pivotal, heavily publicized issue that someone starting a winery in 1998 cannot claim ignorance to the fact that you proceed at your own risk if you use a regional name that is certain to become a sub-appellation.”
    Mort, I appreciate this. However, we have a situation where a winery proceeded to obtain approval for a brand in the proper method and in good faith and received that approval from the only authority that can grant it. Why should they be penalized for doing exactly what the rules asked of them?
    “Calistoga Cellars would have a much better argument if they existed when grandfathering took place. Instead they came in after the grandfathering and intentionally capitalized on a regional name (though not official at the time. They are now claiming ignorance as to the risk they took. Saint Helena, Oakville, Rutherford, Yountville and Calistoga sub-appellations have all been in play for over two decades.”
    It seems to me that Calistoga Cellars addressed any risk when they went to the time and expense of creating this brand and asking for its approval from the only authorities that could grant that approval. The risk they took paid off insofar as they were granted approval for the brand name. They are not claiming ignorance of the risk so much as claiming that their risk taking and playing by the rules happened to pay off and they should not be penalized for playing by the rules that were in place at the time.
    There is a very simple solution to this problem that for some reason worked before but seemingly can’t now: Call the new appellation “Calistoga District”.

  8. Tish - June 13, 2008

    This is shaping up to be an extreme waste of smart people’s energy, attention and $$$. Given the good faith of the wineries when choosing their brands, and the precedence of similar situations of grandfathering, it seems to me that a “Calistoga District” AVA would be a grand compromise.

  9. Ted Henry - June 14, 2008

    Is there any impact here from Fred Franzia’s fued with the NVV a few years ago(Napa Ridge)? It seems that if Calistoga Cellars was grandfathered that they could not sell the business in the future because they would lose that status. That in itself devalues the winery does it not?

  10. Morton Leslie - June 14, 2008

    It is naive to believe that anyone puts a place name on a winery without thinking that consumers would believe that the wines from that winery come from that place. I can assure you with all of the possible names for a winery, Calistoga Cellars was chosen because it implied wines from a place. While you may think that the N.V. Vintners actions against Freddie Franzia’s crimes or defending sub-appellations like Calistoga “stink”, many of us think the odor comes from the opportunists that think they can get away with misleading or outright cheating.
    For many of us every effort should be taken to strengthen the meaning of appellations. This means you are consistent whether it is the big guy or the little guy.
    The vintners should be congratulated for being consistent both in the positions they take and their advocacy. We need more people of principle in this business; we have plenty of the other. To many, the vintners actions smell like a rose.

  11. Tom Wark - June 14, 2008

    Come on, Mort. How did anyone cheat? Calistoga Cellars went through the exact legal process necessary to obtain their name. And no one said a word at the time.
    Further, if they wanted to mislead consumer into buying a wine the consumers thought must be wonderful because of the name, why didn’t they call themseves “Napa Valley Cellars”. Of all the common place names in the Napa Valley appellation, Calistoga has the least prestige.
    It’s just not fair. After not saying anything early on, now NVV wants to rip the equity away from Calistoga Cellars has earned by playing by the rules…and not compensate them.
    That stinks!

  12. Oxvbyxql - June 16, 2008

    best work man great rascal flatts sprint center tickets mvn eagles concert tickets 38727

  13. Tish - June 16, 2008

    How is the Calistoga situation different than Rutherford Hill?
    Rutherford Hill was founded in 1972. The Rutherford AVA was established in 1981. Rutherford as an AVA subdistrict is promoted/perceived as being is distinct quality within Napa Valley, particularly for Cabernet.
    VIsit Rutherford Hill’s website and you see makes a nice range of wines — 5 “featured” and 8 “limited production.” All use the Napa Valley AVA. Not Rutherford, NAPA.
    And yet, in text about the winery, a website visitor will read: “In the estate-owned Mee Lane Vineyard, the majority of grapes grown are Cabernet Sauvignon, each planted on a rootstock and clone matched to the clay loam soil on its vineyard block. Cabernet grapes were first planted here over a century ago, and the small town of Rutherford, located near the center of the valley, emerged as one of Napa’s first prime Cabernet growing districts.” It is also worth noting that if google “Rutherford wine,” the Rutherford Hill site comes up in the top five; so clearly they are in a position to get a bump from their Rutherfordian name. Are they “cheating” by referring to Rutherford as a geographic place, even though they are not mentioning it as an AVA?
    My point here is not to condemn Rutherford Hill, but rather to reiterate Tom’s point that two established Calistoga brands are both getting shafted here.

  14. Terry Hall - June 16, 2008

    Tom, ouch, Ann Coulter?? You apparently have strong feelings about the topic of Calistoga Cellars, but the NVV’s premise is not to single out one brand, but for there to be truthful wine labeling for consumers and fair play for wineries to all play by the same rules. The notion of grandfathering brands came to an end more than twenty years ago. And, while you portray a big guy vs little guy or underdog scenario, this logic is flawed. The Napa Valley Vintners is a trade association representing more than 300 wineries in the Napa Valley, about 2/3rds of which are as small, or smaller, than Calistoga Cellars. More than 90% of all Napa Valley wineries are family-owned businesses. Additionally, these rules proposed by the TTB are opposed by nearly every winery trade association in the U.S., the California State Farm Bureau, the California Dept of Food and Agriculture, wine retailers both on- and off-premise from across the country, along with Congressman Mike Thompson (D-St Helena), Speaker of the House Nancy Pelosi (D-San Francisco), and Senator Diane Feinstein (D-CA).
    Rules regarding truth in wine labeling in the U.S. go back to the Federal Alcohol Act of 1937. Additionally, the wine industry has been on notice since 1986 when new rules were established regarding grandfathering of brands after the establishment of the AVA system. The NVV believes that all brands, Calistoga Cellars included, must follow the same guidelines for brand identity that have been outlined in the TTB’s Beverage Alcohol Manual (BAM) for the past 12 years and which were open to comment for three years prior to that. In the BAM, it states that a brand is essentially on notice if a brand takes the name of a place of geographic significance and if the geographic place becomes an AVA that brand must then abide by the rules of the AVA. The BAM defines “geographic significance” as being two or more reference to the place as a significant grape growing region in wine reference books. One cannot pick up a book on Napa Valley written over the past 150 years without a reference to Calistoga.
    The TTB may be at fault for not ensuring that Calistoga Cellars was fully aware of its guidelines, but Calistoga Cellars was also at fault for either not doing its homework or taking a calculated risk they should not have. The TTB Administrator John Manfreda was questioned before the House Ways and Means Committee on Oversight on May 20 where he came under fire for not following his bureau’s own guidelines when approving Calistoga Cellars. Soon after the hearing, the TTB simply “unplugged” the rulebook from the website as if it no longer existed. Rules that everyone else in the industry had followed for 15 years were, oops, no longer viewable. Not to be a conspiracy theorist, but I offer that the stink you smell is coming from someplace else.
    Furthermore, if the name Calistoga was insignificant to the Calistoga Cellars folks, then why did they not call the brand by a family or fanciful name? They obviously felt there was cache in the name. Though you write, “Of all the common place names in the Napa Valley appellation Calistoga has the least prestige,” I would offer names like Chateau Montelena and Araujo among others as proof of names synonymous for quality from Calistoga.
    For clarification you should know that the TTB has the right to revoke their name in just such a situation as this, and you should be aware that the NVV has offered to help Calistoga Cellars negotiate a phase-in period with the TTB so they could come under compliance. Growers in the AVA have offered to satisfy grape supplies as well. Everyone from the Chamber of Commerce to the City, and so on, has offered to help Calistoga Cellars comply with the AVA as it was intended.
    The fight for consumer truth in labeling is paramount as we take our industry’s responsibilities seriously. America is poised to be the largest wine consuming economy in the world, consumers deserve to know where their wines are from in an honest and forthright way.
    And though it is easy to toss out the number and say they have ten years invested in the brand and now the NVV takes notice, that’s just a broad oversimplification and you know better than that. One gets a business name, a few years later the winery releases its first wine, the AVA petition process was underway at the same time and was petitioned in 2004, all of this was in tandem and Calistoga Cellars knew it was coming all along, they had options, they gambled. This isn’t exactly “ripping the name away from them.”
    But for the record, the rulemaking is not Napa-centric, it threatens the integrity of the American wine industry and its effects will be far-reaching, not the least of which will be in international trade and in ongoing wine place protection worldwide. The U.S. wine industry is very young in comparison to our European counterparts, but we are trying to do the right thing and respect place of origin. Does Pommerol as a sub-appellation of Bordeaux seem silly? The whole process is evolution, so the goal is to play fair and build upon our successes for the sustainability and credibility of our industry. Are the existing rules perfect, no, but we have been moving forward for more than twenty years, avoiding grandfathering mis-descriptive brand names and giving greater credibility to the American wine industry.

  15. Peter L Finkelstein - August 6, 2008

    I look at this purely from a retailers point of view!
    Our store has been selling The Calistoga Estate wines for 2 years. During that period we have sold close to 3000 bottles of these wines.
    All of the wines carry the Napa Appellation
    that’s what the consumer wants to see, they don’t know or care what Calistoga is!
    Peter Finkelstein
    Bay Ridge Wine and Spirits
    Annapolis Maryland

  16. Jay Sams - March 15, 2009

    Of course Buyers don’t care yet about the Calistoga appellation Terry! Becuase it doesn’t exist yet!! Thats the point!! If the Calistoga Appellation is created and high standards are required and maintained, then the public will come to associate a certain quality and characteristic of the Calistoga region. Calistoga Cellars and Estates wouldn’t be sharing those supposed qualities because they are only 25-30% composed of Calistoga grapes. Regardless of how you feel about Calistoga Cellar, Calistoga Estates was established by a DC business man AFTER the petition was filed in 2003 to get an AVA for Calistoga. Calistoga Estates is obviously an opportunist seeking to use the “Calistoga” and get grandfathered in. Something stinks alrite, but its not the NVV

Leave a Reply