California Bill Targets American Wine Labels

California lawmakers are weighing a bill that would tighten the rules for wines sold as “American,” a move that could force wineries to use only U.S.-grown grapes and ingredients if they want that label on bottles sold in the state.

Assembly Bill 1585 would raise the standard from the current federal threshold of 75% to 100%, according to the measure’s supporters. Under existing federal rules, a wine can be labeled American if at least 75% of the liquid comes from U.S.-grown grapes or agricultural products, which leaves room for wineries to blend in imported bulk wine and still use the appellation.

The proposal is being framed by its backers as a truth-in-labeling measure meant to give consumers a clearer picture of what they are buying. Assemblymember Rhodesia Ransom, D-Tracy, one of the bill’s authors, said the goal is to make sure labels reflect where the wine actually comes from.

“We want to make sure that there is truth in advertising when it comes to wine coming from the U.S.,” Ransom said. “This is another way of us ensuring that consumers know what they’re purchasing.”

The bill does not ban imports. But it comes at a time when California grape growers say imported bulk wine has become a bigger problem for them, especially as the state’s wine market has weakened and vineyards have been left with unsold fruit. Industry estimates suggest that about a quarter of California’s crop went unpicked last year, one of the highest levels on record.

Growers say large wineries have continued to bring in tens of millions of gallons of bulk wine each year, including from Australia, New Zealand and Chile, even as California grapes have gone unharvested. Last year, bulk wine imports rose 24% while many growers struggled to find buyers for their fruit.

Rodney Schatz, a San Joaquin County grower and winemaker who sells bulk wine to wineries across California, said imported wine is undercutting local producers. He said he has torn out about a third of his vineyard acreage in recent years because he could not sell enough grapes or absorb the excess into his own bulk wine business.

“Imported bulk wine is killing us,” Schatz said.

Supporters of AB 1585 argue that the current labeling system can confuse consumers because wines made entirely from California grapes usually carry a “California” appellation, while wines blended with foreign wine can still be labeled “American.” That, they say, creates an incentive for wineries to use imported wine while presenting the product as domestic.

Natalie Collins, president of the California Association of Winegrape Growers and a co-sponsor of the bill, said the measure would not solve the state’s oversupply problem on its own but could begin to rebuild trust in labels and support growers who are struggling with low prices.

“This alone is not going to fix everything,” Collins said. “It is really a first step to rebuilding consumer trust and moving forward.”

The bill is also backed by Family Winemakers of California, which represents about 200 small and mid-sized family-owned wineries. But it faces opposition from the Wine Institute, which represents about 1,000 wineries and includes many of the larger companies that import bulk wine.

Tim Schmelzer, vice president for California state relations at the Wine Institute, said AB 1585 could create unintended consequences by making labels less useful to consumers. He said federal law requires an appellation before a varietal name can appear on a label, and that wineries now use “American” as a way to identify wines made from blends of U.S. and foreign grapes while still naming the grape variety.

If California adopts the bill, Schmelzer said, wineries making cabernet sauvignon from both Californian and Australian grapes might no longer be able to call it cabernet sauvignon on the label and instead would have to use broader terms such as “red blend.”

“They would lose the ability to communicate and connect with customers,” Schmelzer said.

Collins countered that wineries wanting varietal labeling could simply source more grapes from California. She said there is still enough domestic supply for many varieties now being blended with foreign wine.

Stuart Spencer, owner of St. Amant Winery and executive director of the Lodi Winegrape Commission, said import patterns show that large companies often turn to foreign bulk wine when domestic grape prices rise. He said that makes clear those imports are competing directly with California growers.

“That wine is directly competing with California-grown grapes, particularly in the Central Valley,” Spencer said. “And a portion is ending up in wines labeled American.”