San Francisco Chronicle - (Sunday)
In battle over wine labels, key question goes unasked
The war over winemaker Joe Wagner’s Oregon wine labels has escalated.
For months now, the Oregon wine community and a state lawmaker have alleged that Wagner violated state and federal regulations in the labels of two of his wine brands, Elouan and the Willametter Journal, which are composed of Oregon grapes but vinified in California. The battle escalated last month with official rulings against him.
But now Wagner is fighting back — by claiming that his opponents have ulterior motives, including a trademark dispute and a political conflict of interest.
The issue: Wagner’s bottle labels and marketing materials used terms like “Oregon Coast” and “Willametter” that seemed to imply geographic origins without technically meeting the requirements for federally recognized American Viticultural Area status. (It was not Wagner’s only clash with the Oregon wine establishment this fall. It also cried foul after he canceled $4 million worth of contracts with grape growers in
“The state of Oregon has concluded that they have crossed the line from fanciful to fraudulent.” Rep. David Gomberg, Oregon
southern Oregon, citing excessive smoke taint from the summer’s wildfires.)
Now, the Alcohol and Tobacco Tax and Trade Bureau, which oversees the wine-region designations, has ordered Wagner to change seven of his wine labels, which the bureau previously approved. And based on the violations, the Oregon Liquor Control Commission has recommended that Wagner be blocked from selling wine in that state.
Many in the Oregon wine industry, including Willamette Valley Vineyards owner Jim Bernau, are celebrating the decisions as victories. “I really applaud” the bureau, Bernau said. “I don’t think the (bureau) is anywhere near finished with the issue.”
Wagner said he is complying and has already changed the labels but maintained that he never violated any labeling rules.
He sees how events unfolded very differently.
“It has turned into nothing but a slanderous marketing campaign,” said Wagner, who produces a number of wine brands under his St. Helena company Copper Cane Wine and Provisions.
Wagner claims the labeling skirmish is really about a trademark dispute. After debuting his new Willametter Journal brand, Wagner got a call in early 2018 from Bernau, who holds the trademarks to “Willamette Valley Vineyards” and “Willamette.” He felt Wagner’s use of “Willametter Journal” violated his trademarks. “I was polite, but I was firm,” said Bernau. “I said, ‘Joe, I’m really gonna have to ask you to stop selling that wine.’ ”
“We didn’t see any confusion at all,” said Wagner of the implication of trademark infringement. After multiple phone calls, Bernau said he would hand off the discussions to the legal team for Willamette Valley Vineyards, which is a publicly held company. Wagner went further: He filed to have Bernau’s trademark canceled.
“Willamette Valley is an appellation, and we believe you should not be able to trademark an appellation as a brand name,” said Wagner. Several other wine companies hold trademarks for appellation names, like Chehalem Winery, Stags Leap Wine Cellars and Alexander Valley Vineyards. The FindLaw website describes wine trademarks as an area that’s “ripe for confusion.”
In Wagner’s mind, the labeling complaints are “retribution” for his trademark disagreement with Bernau. Although Bernau is by no means the only figure who called for action against Wagner’s wine labels, it’s true that Willamette Valley Vineyards was among his most vocal critics. The winery issued its own press releases about Wagner’s labeling violations and hosted an online seminar in early November to answer questions.
Wagner has also claimed that there is political corruption at play. State Rep. David Gomberg, who brought the labeling concerns before the Oregon Department of Justice and to the House Committee on Economic Development and Trade, is an investor in Willamette Valley Vineyards.
“We have an elected official using taxpayer dollars against a competing winery that he sees as gaining ground in the marketplace,” Wagner said.
Gomberg confirmed that he is an investor in Willamette Valley Vineyards — one of 17,000 investors, he said. His investment in the winery is worth $6,287, he said, “so the inference that I’m here trying to make money is laughable.” Bernau has donated $9,700 to the Gomberg for State Rep organization since 2012, according to Oregon state records.
“I should make it clear that yes, I’m an investor in an Oregon winery,” Gomberg said. But he dismissed the notion that his working to expose Wagner’s labeling violations was rooted in anything other than concern for his constituents: “I’m not doing this for the money, I’m doing this because I think it’s wrong . ... I think we’ve got a large California company that is not only trying to take advantage of our investment but also trying to bully his way to a result that benefits him.”
“If he thinks that there’s a campaign waged against him,” Gomberg continued, “I would say that there’s a campaign being waged against Oregon.”
Trademark disputes, labeling violations, smoke taint claims: It’s been a rocky year for Wagner’s relationship with the Oregon wine industry. To what extent are these three issues related?
It’s easy to understand why Wagner might strike some in Oregon as a bull in a china shop. The heir to a Napa Valley wine dynasty — his grandfather founded Caymus Vineyards — Wagner shocked the wine world when, in 2015, he sold his Pinot Noir brand Meiomi to Constellation Brands for $315 million, a deal that included no vineyards or winery. The parent company for his various brands, Copper Cane, is on track to produce 1 million cases of wine annually by 2021.
If Wagner is known for anything, it’s for a style of Pinot Noir that’s saccharine, fruity and boozy — a kind of lowest-commondenominator style beloved by the mass market and loathed by aficionados. His Pinots, whether under the Elouan, Willametter Journal or Belle Glos labels, are certainly not the Pinots that are most often associated with Oregon — a state that has worked hard to establish a reputation for earthy, low-alcohol, Burgundy-style Pinot Noir. So Wagner goes to Oregon, trucks a bunch of grapes back to Rutherford, fashions them into his style of Pinot Noir. Was that Wagner’s main offense? No, but it certainly did not ingratiate him to the Beaver State.
Wagner’s main offense, at least as far as the labeling issue is concerned, was fairly simple. To review: If you pick grapes in Oregon but then bring them out of the state to vinify — as Wagner did — you forfeit the right to use specific appellations, such as Willamette Valley or Rogue Valley or Umpqua Valley, on your wine label. You can only call them Oregon wines. Wagner claims that both the Elouan and Willametter Journal bottles followed this rule, since their labels did not literally name viticultural areas.
The issue, for his critics, is that Elouan boxes and other marketing materials mention that the wine comes from Rogue, Umpqua and Willamette; and that “Willametter” is awfully close to “Willamette Valley.” In other words, the charge is that Wagner attempted to use fancy terms to get around the rules, and he used geographic terms that were designed to mislead consumers into believing that the bottles carried those designations.
“In simple terms,” Gomberg said, “Copper Cane has been saying that they’re engaged in fanciful marketing, and the state of Oregon has concluded that they have crossed the line from fanciful to fraudulent.”
Here’s the thing. The Willametter Journal Pinot Noir does come entirely from Willamette Valley fruit, according to Wagner. He admitted he may have used some non-Willamette Pinot Noir to top up evaporated portions of the wines (which is standard across the industry), but he swore: “The Willametter Journal is over 99 percent Willamette Valley.” Similarly, he emphasized, the Elouan wine does come from fruit from the Rogue, Umpqua and Willamette valleys.
So why should he lose the ability to advertise that his grapes come from the Willamette Valley just because the grapes cross state lines? Because Oregon has stricter rules than the federal standard — stricter, too, than California. Oregon requires that a wine be at least 95 percent from its listed American Viticultural Area (federal law requires just 85 percent), and at least 90 percent its listed grape variety (federal law requires just 75 percent).
Oregon’s wine industry wants to ensure that all Oregon wine labeled with a prestigious AVA like the Willamette Valley is held to these high standards, and it can’t ensure that if the wine is produced in California. Oregon’s laws may be the strictest in the nation, but some feel they’re still not strict enough: At the moment, the Oregon wine industry is considering increasing the percentage requirements for both viticultural area and variety to 100 percent.
This presents one crucial question that, as this saga has played out over recent months, no one has asked yet. If Wagner isn’t actually mischaracterizing where his grapes came from — if instead, his offense is only that he made his wine in California rather than in Oregon — how is the consumer being harmed? Sure, it would benefit the local industry to make more wine in Oregon rather than outsourcing it to the south, but there’s no evidence that the transport of the grapes across state lines diminishes their quality.
To the extent that stylistic differences play any role in the Oregon wine industry’s beef with Wagner, those complaints shouldn’t inform government decisions. If Wagner makes Pinot Noirs that many believe to be adulterated adaptations of Oregonian terroir — if they seem like stylistic aberrations from the low-alcohol, Burgundian ideal — that is his prerogative.
Esther Mobley is The San Francisco Chronicle’s wine critic. Email: emobley@ sfchronicle.com Twitter: @Esther_mobley Instagram: @esthermob