Former Vintners president discusses consistency of WDO

2013-08-31T21:00:00Z Former Vintners president discusses consistency of WDOReverdy Johnson Napa Valley Register
August 31, 2013 9:00 pm  • 

I was the president of the Napa Valley Vintners and its spokesman during the negotiations and public hearings in the months preceding the adoption in early 1990 of the Winery Definition Ordinance, known as the WDO.

Like the Agricultural Preserve established 22 years before it, the WDO seeks to preserve our agricultural land. While recognizing that wineries are an integral part of a successful and sustainable local wine industry, the WDO ensures that winery activities serve the county’s goal of maintaining agriculture as the highest and best use of our land.

For the first time in our valley’s history, the WDO specified for wineries located in the agricultural zoning districts of our county the uses (and the only uses) in which they can engage, including wine production, marketing, tours and tastings, limited food service and retail sales.

One important requirement of the WDO is the 75 percent grape source rule.

That rule requires wineries established after the adoption of the WDO to use at least 75 percent Napa County grapes in the wines they produce.

This ties the wineries’ use of agricultural land directly to the fruit grown on that land. Napa County broke new ground in adopting this land-use law.

Wineries that were established before the WDO, often referred to as legacy wineries, were not subjected to the 75 percent rule as a matter of fairness.

They could and did make their wines from grapes grown anywhere, inside or outside Napa County.

The county could have classified the pre-WDO wineries as legal nonconformities, but that status (or “stigma”) would have called into question the legitimacy of their operations and made them subject, at worst, to an abatement of their nonconformity or, at best, to reduced financial or marketing viability.

A critical trade-off in obtaining the support of the WDO by the legacy wineries was that they constitute legal conforming uses.

The 75 percent rule addresses what happens when these pre-WDO wineries expand their operations. If a pre-WDO winery expands its production level inside the existing winery facility with no incursion onto agricultural lands, the 75 percent rule does not apply.

This preserves the nexus between the grape source rule and the preservation of agricultural land. I recall that at one point in the WDO deliberations, it was proposed that existing wineries be able to expand their footprint by 20 percent without being subject to the 75 percent rule, but County Counsel correctly observed that this would undermine the justification of the rule.

Restraints of trade like this (the requirement to buy local grapes) are frowned upon by the U.S. Constitution, so the 20 percent expansion right was rejected.

Instead, if a winery expands its footprint after 1990, that portion of the winery’s production increase that is the result of the physical expansion is subject to the 75 percent rule. This again affirms the nexus between the grape source rule and the preservation of agricultural land.

The county does not examine the winery’s grape sourcing for the pre-existing production level. It can be 100 percent Napa Valley or zero percent Napa Valley; it can change from vintage to vintage. It is the winery’s lawful entitlement. This is how the rule reads.

This is how the county has applied it for 23 years.

Andy Beckstoffer, who has recently argued against the county’s consistent and correct application of the 75 percent rule to pre-WDO wineries, addressed the issue properly and directly at a public hearing in 1989:

“(H)ow (do) you want to treat the existing wineries who really built this industry and developed it for us over the past 20, 40 years, whether you want to put on them the stigma, if you will, and the uncertainty of a legal nonconforming status. We’ve said there’s no abatement; we’ve said, you know where they can expand, where they can develop or not develop. There are technical arguments, and I appreciate those arguments, but from my point of view, it really comes down to how you’re going to treat these people who have built this industry, whether you’re going to put the stigma on them and put the uncertainty on them or not.”

Dan Jonas, then chairman of the county Planning Commission, said in his recent editorial (Aug. 24) that the final Environmental Impact Report  for the WDO did not contemplate what he calls “shifting of existing production” when a pre-WDO winery expands its footprint and production level, with the increased production subject to the 75 percent rule and the existing entitlement remaining exempt from any grape sourcing requirement.

The environmental report makes it clear that this very fact was taken into account.

Jonas himself made sure that the environmental report consultants were aware of his concern, and they responded to his comment (Comment 591 in the environmental report):

Comment: Commenter (Jonas) points out that 75 percent rule applies only to new wineries and expansion of wineries beyond the Winery Development Area. The result of this is that an existing winery can apply their current production capacity ... to out-of-county grapes.

Response: Our projections were based on this same understanding.

No one is claiming that the WDO is perfect, but we can say with certainty that the grape sourcing rule was fully considered, is clearly written, has been consistently applied by the county and has served the county well. To suggest that it be reinterpreted or changed is unnecessary, unfair and a breach of faith as to the legacy wineries.

Johnson is a past president of the Napa Valley Vintners.

Copyright 2015 Napa Valley Register. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(14) Comments

  1. Wineandfood
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    Wineandfood - September 01, 2013 7:23 am
    Well stated. Now go away Beckstoffer or watch the 75% go away.
  2. glenroy
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    glenroy - September 01, 2013 8:53 am
    As I see it…there is a hole here and ‘faith’ should have anything to do with it....these mega wineries like Raymond who benefit by exclusion were not the legacy owners when WDO passed.
    If the WDO intent was to protect a label…well then fine...if it was to protect those who helped build what we have today than the vineyard producers are clearly not being protected and to that extent the original legacy wineries either. At the core is nobody knows what percent of local grapes these mega wineries use….
    When the WDO was passed, from a vineyard producers perspective, the illusion was that vineyards couldn’t grow in dry climates, wet climates, high, low etc… it had to be NoCal micro claimant…but the fact is wine grapes grow in the Sierra Madras, Oregon coast, middle of Wyoming, New Mexico desert…even Lake County was considered too hot...

  3. winebroad
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    winebroad - September 01, 2013 11:39 am
    So that confirms Beckstoffer cut a deal in 1990 to get the 75% rule in the first place. It wouldn't have happened otherwise. Will he continue to be honorable and live up to his words?
  4. Crosscountrykid
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    Crosscountrykid - September 01, 2013 12:14 pm
    Thank you, Mr. Johnson, for a most lucid presentation. I have been trying to connect the dots of the various positions and your letter helped alot (I'm not the quickest kid on the block). glenroy, are you saying that in fact we don't have good data, after all these years, on how much "Napa" wine is produced that doesn't contain 75% in-county grapes? Seriously, just asking.
  5. vocal-de-local
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    vocal-de-local - September 01, 2013 12:39 pm
    I propose a fairly simple solution. It's called consumer disclosure. Visitors to the Valley believe that when they are visiting Napa Valley wineries, that they are being served Napa Valley wines made from NV grapes.

    Consumers deserve to know the source of their wines. if a winery is using less than 75% Napa Valley wines, wineries need to disclose that information in their tasting rooms. For example "Around 40% of our grapes are derived from Lodi, not Napa Valley"(if that's the case).

    This is fair. I think it's deceptive tricking visitors into thinking they're consuming Napa Valley wines when grapes are coming from a less desirable agricultural region.

    I think the same applies to our agricultural food sources and that it should be disclosed when food is grown in Mexico and when it contains GMO's. Let the consumer be the judge.
  6. vocal-de-local
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    vocal-de-local - September 02, 2013 12:17 pm
    Here's another great article on the subject:

    Quote: "Here are the details.

    Napa Valley wine should be made from Napa Valley grapes. That's basic.

    The question before the Napa County Planning Commission is, how much non-Napa wine should it allow to be made in Napa Valley?

    In the great wine regions of Europe, the answer would be "none." But in most of the USA, the answer is "a limitless ocean."

    But this is Napa County we're talking about, and the laws are different there."

    "A key provision of the WDO was that wineries that wanted to expand their production facilities had to prove they had access to enough Napa Valley grapes to do so. The county as a whole didn't want giant wine factories like you can see in Modesto."

    And so, the bigger issue here is whether or not we want Napa County to become giant wine factories. If we left it up to some corporations, That's the direction the industry would head.
  7. glenroy
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    glenroy - September 02, 2013 12:43 pm
    CCK...that is the question that needs an anwser...

    The way I read is an honor system…not sure if my concerns are part of the issues here, but there is a lot of wine bottled with Napa Valley on the label that has little, perhaps no Napa County grapes. I think it’s there in microdots between the lines in Beckstoffer’s quote…:))..but don't quote me on that. As of a few years ago more grapes from San Luis Obispo ended up in Napa Valley bottles than SLO bottles…we have close friends there in the business ….Napa wineries pay more for SLO grapes than many of the wineries there can. If the grapes are that good at 1/4-1/3 the cost..what % of NC grapes end up being used?
    I’m no regulator type, but I do think Beckstoffers have legitimate concerns and I’m not saying my conerns are theirs...
    How many legacy wineries are owned by the legacy owners? All but a handful the mega wineries are owned by conglomerates….is the legecy thing is being abused?

    If it is it harms the growers...
  8. glenroy
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    glenroy - September 02, 2013 4:34 pm
    Personally I thing they should allow as much as possible to be produced here…but it also seems to me they should disclose the percentage of Napa County juice….
  9. Wineandfood
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    Wineandfood - September 02, 2013 6:42 pm
    They do disclose it it's called labels, and they are governed by the TRB which has much bigger teeth than the county.
  10. Damaso-1841
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    Damaso-1841 - September 03, 2013 4:24 pm
    In terms of protecting consumers, Wineandfood is more than correct. If a label carries the "Napa County" appellation, 75% of the wine must be derived from grapes grown in the county. If a label carries the "Napa Valley" appellation, 85% of the wine must be derived from grapes grown in the appellation. (Code of Federal Regulations, Volume 27, Part 4.25, a and e).

    In terms of protecting the growers, for the 2012 harvest the weighted average grower return per ton in Napa was $3,479.62, (all varieties), the next closest in price per ton was Sonoma with $2,144.89. (CA Dept. of Food and Agriculture, Grape Crush Report, 2012, Table 10)
  11. vocal-de-local
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    vocal-de-local - September 04, 2013 2:05 am
    Consumer protection should go beyond just disclosing the content on a label. When consumers visit the Napa Valley, they are expecting Napa Valley grapes. Just ask any tourist.

    It's deceptive bringing grapes in from lower quality regions and serving them at Napa Valley wineries. The winery tasting room (not just the label on a bottle) should disclose the % of grapes that are grown in the Valley and the % grown elsewhere. This is fair to consumers who are expecting Napa Valley wine grapes when they visit Napa Valley wineries. FULL disclosure. It's only fair.
  12. glenroy
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    glenroy - September 04, 2013 10:55 am
    Who or what agency monitors the ratio?

    Other posts say it's an honor system...

    There are more than a couple ‘labels’ that ship their juice to out of county for blending so there is no way to know unless someone sits through the process, which is nowhere near failsafe because it always be blended again, and again etc.
  13. Damaso-1841
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    Damaso-1841 - September 06, 2013 9:22 am
    Glenroy -- there simply is not enough space to site to you here the recording requirements from the Federal Government and the State Government. Just for the feds, for example, you might peruse Subpart O of the code mentioned above, paragraphs 24.300 through 24.323. In short it is not an honor system, it is meticulous system of tax collection.
  14. Damaso-1841
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    Damaso-1841 - September 06, 2013 9:26 am
    vocal-de-local -- I think I understand your point: not that there is not full disclosure, but that you dislike what is being disclosed. In other words, we need to change the appelation regulations to require 100%. This would require a change in Federal Regulation -- a long process.

    A practical approach in the meantime is to drink exclusively wines which carry the words "Estate Bottled" on the label. The Federal Code requires that a winery can use "Estate" on a label only if it "grew all of the grapes used to make the wine on land owned or controlled by the winery within the boundaries of the labeled viticultural area. Code of Federal Regulations, Vol 27, Section 4.26, Par a,2
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