Senate Tax Bill Provision Would Benefit U.S. Winemakers

The practice of labeling wines as Chablis, Burgundy, Champagne, or Port is common among U.S. wine producers, despite the fact that they are also the names of regions within France and other European countries. Because of this, these countries want to ban the use of their regional names for wine produced by non-Europeans. U.S. wine producers are afraid that such a ban might indeed come to light during current trade talks under the General Agreement on Tariffs and Trade (GATT). Such an agreement would be costly for the U.S. wine industry because of the consumer confusion that would result from renamed wines.

As a result of this labeling dispute, the Senate tax reconciliation bill, now in conference with the House version, contains a provision that will ease the fears of U.S. winemakers. The provision, sponsored by Sen. Alfonse D'Amato (NY), will write into U.S. law regulations allowing the continued use of "semigeneric" names for non-European produced wines. This is an important issue for California, home to a large and vibrant wine industry, which includes E&J Gallo Winery Inc., the largest wine producer in the world.

Volume 4, Bulletin 26, July 24, 1997