[Federal Register Volume 62, Number 66 (Monday, April 7, 1997)]
[Rules and Regulations]
[Pages 16479-16490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8808]
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DEPARTMENT OF THE TREASURY
Bureau of Alcohol, Tobacco and Firearms
27 CFR Part 4
[T.D. ATF-388; Ref. Notice Nos. 581, 749 and 793]
RIN 1512-AB08
Gamay Beaujolais Wine Designation (92F-042P)
AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of
the Treasury.
ACTION: Treasury Decision, Final Rule.
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SUMMARY: This final rule amends the wine labeling regulations to allow
use of the term ``Gamay Beaujolais'' on American wine labels for a
period of 10 years. From the time this final rule takes effect until
the end of the phase-out period, a wine which derives not less than 75
percent of its volume from Pinot noir grapes, Valdiguie (``Napa
Gamay'') grapes, or a combination of both varieties, may use ``Gamay
Beaujolais'' as a type designation of varietal significance. However,
from January 1, 1999, until the end of the phase-out period, brand
labels using the designation ``Gamay Beaujolais'' must also bear in
direct conjunction therewith the varietal names Pinot noir and/or
Valdiguie, along with the following statement on the brand or back
label: ``Gamay Beaujolais is made from at least 75 percent Pinot noir
and/or Valdiguie grapes.'' After the expiration of the phase-out
period, the term ``Gamay Beaujolais'' will no longer be recognized as a
designation for American wines.
EFFECTIVE DATE: This final rule is effective May 7, 1997.
FOR FURTHER INFORMATION CONTACT: Thomas B. Busey, Wine, Beer and
Spirits Regulation Branch, Bureau of Alcohol, Tobacco and Firearms, 650
Massachusetts Avenue, NW, Washington, DC 20226, Telephone: (202) 927-
8230.
[[Page 16480]]
SUPPLEMENTARY INFORMATION:
The Federal Alcohol Administration Act
Section 105(e) of the Federal Alcohol Administration Act (FAA Act),
27 U.S.C. 205(e), vests broad authority in the Director, ATF, as a
delegate of the Secretary of the Treasury, to prescribe regulations
intended to prevent deception of the consumer, and to provide the
consumer with adequate information as to the identity and quality of
the product.
Regulations which implement the provisions of section 105(e) as
they relate to wine are set forth in title 27, Code of Federal
Regulations, part 4 (27 CFR part 4). Section 4.23(b) provides that the
name of a single grape variety may be used as the type designation of a
grape wine if the wine is labeled with an appellation of origin, and if
not less than 75 percent of the wine is derived from grapes of that
variety, the entire 75 percent of which was grown in the labeled
appellation of origin area. Section 4.23(d) provides that the names of
two or more grape varieties may be used as the type designation for a
wine if all of the grapes used to make the wine are of the labeled
varieties, and the percentage of the wine derived from each variety is
shown on the label (with a tolerance of plus or minus 2 percent).
Further rules are mandated for the use of varietal designations for
wines labeled with multicounty or multistate appellations of origin.
Section 4.28 of the regulations was added by T.D. ATF-370, 61 FR
522 (1996). This section contains a category of type designations of
varietal significance for American wines. These names designate wines
which have some varietal basis, but which do not meet the requirements
for use of a single varietal designation. These designations apply to
wines which are composed of a mixture of specific grape varieties. ATF
believes these wines demonstrate characteristics of the grape varieties
used to produce them and their names imply some grape variety source.
This type designation was established in regulations first promulgated
in 1996.
Section 4.34(a) requires that the class and type be stated in
conformity with the standards of identity in Subpart C, and in the case
of still wine, there may appear in lieu of the class designation any
varietal (grape type) designation, type designation of varietal
significance, semigeneric geographic designation, or geographic
distinctive designation to which the wine is entitled. Additionally,
Sec. 4.34(b)(1) provides that an appellation of origin disclosing the
true origin of the wine shall appear in direct conjunction with and in
lettering substantially as conspicuous as the class and type
designation if a grape type (varietal) designation is used under the
provisions of Sec. 4.23 or a type designation of varietal significance
is used under the provisions of Sec. 4.28.
History of Gamay Beaujolais Name
Beaujolais is a region in France known for producing a distinctive
type of wine. The ``Gamay noir a jus blanc'' (otherwise known as the
``Gamay'') is the predominant grape variety used in the production of
Beaujolais wine.
In the 1940s, a grape grown in California was identified by
researchers at the University of California at Davis (UCD) as the
``Gamay Beaujolais'' grape. At that time, it was mistakenly thought
that this was the same Gamay grape grown in Beaujolais, France. For
decades, American wines made from this grape were labeled as ``Gamay
Beaujolais.''
In the late 1960's, researchers at UCD decided that the grape known
as ``Napa Gamay'' was the true Gamay grape, and that the ``Gamay
Beaujolais'' vine was actually a clone of Pinot noir. The Foundation
Plant Material Service (FPMS) at UCD (a service operated in cooperation
with UCD which makes virus-free, true type plant material available to
the industry), identified the Gamay Beaujolais vine as a clonal
selection of the Pinot noir variety.
Notwithstanding the conclusion that the ``Gamay Beaujolais'' grape
was not related to the true Gamay grape variety, ATF's predecessor
agency decided to allow wines produced from both the Napa Gamay and
Pinot noir grape varieties to be labeled as ``Gamay Beaujolais,''
pending a final resolution of the many controversies related to the
names of grape varieties which had been erroneously identified in the
United States. In the 1980s, ATF began the process of evaluating many
of these varietal names, in order to formulate an authoritative list of
grape varieties used to produce American wines.
Winegrape Varietal Names Advisory Committee
In 1982, ATF established the Winegrape Varietal Names Advisory
Committee (referred to as the ``Committee'') to conduct an examination
of the hundreds of grape variety names and synonyms in use in the
United States. (47 FR 13623, March 31, 1982). According to its charter,
the Committee was to advise the Director of the grape varieties and
subvarieties which are used in the production of wine, to recommend
appropriate label designations for these varieties, and to recommend
guidelines for approval of names suggested for new grape varieties.
Their recommendations were restricted to the names of grapes used in
producing American wines. The Committee's final report, presented to
the Director in September 1984, contained the Committee's findings
regarding use of the most appropriate names for domestic winegrape
varieties.
The final report of the Winegrape Varietal Names Advisory Committee
concluded as follows:
At present, there are substantial plantings of two varieties which
include the name Gamay. Neither are the true Gamay (or one of its
several clones) grown in Europe. Gamay Beaujolais is a clone of
Pinot Noir, and Napa Gamay is an as yet unidentified variety, which
is neither Gamay nor Pinot noir.
The Committee accepted the recommendation of its subcommittee that the
names ``Napa Gamay'' and ``Gamay Beaujolais'' should be phased out.
They noted that since Napa Gamay and Gamay Beaujolais (Pinot noir) were
two distinctively different varieties, wine made from a blend of both
grapes should not be labeled with one varietal designation. Id. at 27-
29. The Subcommittee on Gamay Beaujolais actually recommended that
``the wine known as `Gamay Beaujolais' be considered a limited semi-
generic wine produced from the grape variety Pinot noir and the grape
currently known as `Napa' Gamay, either singly or in combination with
each other.'' The Committee's Final Report stated that the Committee
had ``considered a suggestion that the term Gamay Beaujolais be allowed
for use on domestic wine labels as a `semi-generic' non-varietal
designation,'' but made no recommendation on that issue due to the
conclusion that ``the suggestion is outside the mandate of the
Committee, which is limited solely to varietal names.'' The Committee
did, however, note this suggestion for ``possible consideration'' by
ATF.
Notice No. 581
On the basis of the recommendations contained in the Committee's
final report, ATF issued Notice No. 581 on February 4, 1986 (51 FR
4392). That notice proposed the addition of subpart J, American Grape
Variety Names to part 4. The new subpart was to contain a list of every
grape varietal name authorized for use in the production of American
wines. ATF received 156 written comments in response to this notice.
With respect to use of the name ``Gamay Beaujolais,'' Notice No.
581 proposed that it should be permitted as an alternate grape variety
name for future use only for a period of five years.
[[Page 16481]]
During the period of its continued use, Notice No. 581 proposed that
the actual name of the grape, either Pinot noir or Napa Gamay, should
appear on the label in direct conjunction with the designation ``Gamay
Beaujolais.'' After the passage of five years, Gamay Beaujolais could
no longer be used as a label designation.
Comments to Notice No. 581
The proposal to phase out use of Gamay Beaujolais proved
controversial. Only a few respondents concurred with ATF's proposal,
while 27 respondents objected to some part of the proposal. Many
commenters suggested that Gamay Beaujolais was well known to consumers
as a light, red, young, fruity wine, and that consumers did not view it
as a varietal wine. Some commenters stated that consumer recognition of
Gamay Beaujolais was good; that the wine was popular; that consumers
knew what they were buying, and that elimination of the designation
would serve no consumer purpose. Winery proprietors and grape growers
cited the large market for this wine and argued that elimination of the
designation would have a severe economic impact on their businesses.
Louis P. Martini, a member of the Winegrape Names Advisory
Committee, submitted a comment in opposition to the proposed 5-year
phase-out period. He suggested that ``[t]o remove this name from wine
labels would effectively remove this wine from the market.'' Other
industry members advocated a longer phase-out period, or objected to
the phase-out altogether. On the other hand, one consumer advocate
suggested that five years was too long a phase-out period, and the
French Government opposed any recognition of the term ``Gamay
Beaujolais'' in the regulations.
Notice No. 749
Because the comments on Notice No. 581 varied widely in their
approach to the proposals, and because a lengthy period of time had
passed since the issuance of Notice No. 581, ATF decided to open the
issue of grape varietal names to additional public comment. Thus, on
September 3, 1992, ATF issued Notice No. 749 (57 FR 40380), seeking
comment on new and revised proposals relating to grape variety names.
By this time, UCD had determined that the grape known as ``Napa
Gamay'' was not the Gamay grape of France. The ``Napa Gamay'' grape
variety was positively identified by the FPMS as Valdiguie, although it
is not widely known by this name in the United States. In Notice No.
749, ATF proposed that ``Napa Gamay'' be considered a synonym for the
prime name Valdiguie and requested comments on whether Napa Gamay
should be phased out in the future. ATF also announced that the ``Gamay
Beaujolais'' issue would be the subject of a separate notice of
proposed rulemaking.
Notice No. 793
On April 5, 1994, ATF published Notice No. 793 (59 FR 15878) in the
Federal Register proposing specific conditions for the use of Gamay
Beaujolais as a wine label designation. The 90-day comment period
closed on July 5, 1994.
ATF stated that the evidence considered by ATF established that
``Gamay Beaujolais'' was not a true varietal name, and that the two
grape varieties which have been called ``Gamay Beaujolais'' in this
country are not Gamay grapes. Thus, ATF concluded that Gamay Beaujolais
should not be listed in subpart J of 27 CFR part 4 as a grape variety
name. On the basis of the comments to Notice Nos. 581 and 749 and
current trade and consumer recognition of the name, ATF stated that
many consumers viewed Gamay Beaujolais as a type of red wine which may
be described as light and fruity. However, ATF also believed that many
consumers associated the designation ``Gamay Beaujolais'' with a wine
produced from the Pinot noir or Napa Gamay grape varieties. Therefore,
instead of phasing out the use of the designation ``Gamay Beaujolais''
as proposed in Notice No. 581, ATF proposed in Notice No. 793 to
specifically allow the continued use of Gamay Beaujolais under
Sec. 4.34, relating to class and type designations. Section 4.34 was
selected for placement of the Gamay Beaujolais designation because
Sec. 4.28 and the type designations of varietal significance it
established did not exist in 1994.
As previously discussed, existing regulations provided that a wine
was not entitled to a varietal type designation unless 75 percent of
its volume is derived from grapes of that variety. Accordingly, ATF
proposed to allow the use of the designation ``Gamay Beaujolais'' only
where the wine derived not less than 75 percent of its volume from
Pinot noir grapes or Napa Gamay grapes. Wine labels bearing the
designation ``Gamay Beaujolais'' would also have been required to bear
a varietal type designation (Pinot noir or Napa Gamay) and an
appellation of origin. Furthermore, the proposed amendment to Sec. 4.34
specified that the optional designation ``Gamay Beaujolais'' must
appear in direct conjunction with the varietal type designation and the
appellation of origin, and must appear in lettering of substantially
the same size and kind.
T.D. ATF-370
On January 8, 1996, ATF issued T.D. ATF-370 (61 FR 522), a final
rule on the issue of grape variety names for American wines. ATF issued
a comprehensive list of grape variety names approved for use on
American wine labels. The final rule took effect on February 7, 1996.
The name ``Napa Gamay'' is listed as a synonym for ``Valdiguie '';
however, ``Napa Gamay'' may only be used on labels of wines bottled
prior to January 1, 1999. The name ``Gamay Beaujolais'' was not listed
as an approved varietal name. Instead, the preamble noted that ATF has
made Gamay Beaujolais the subject of a separate rulemaking proceeding.
The preamble also stated that ``[i]n the interim, ATF will permit
domestic wineries to use Gamay Beaujolais as a designation. Such wine
must derive at least 75 percent of its volume from Pinot noir, from
Valdiguie (Napa Gamay), or from a mixture of these grapes.'' 61 FR at
532.
Comments to Notice No. 793
There were 237 comments submitted in response to Notice No. 793.
211 comments were in favor of allowing the continued use of the
designation ``Gamay Beaujolais'' on wine labels, while 26 were opposed
to any use of ``Gamay Beaujolais'' on American wine labels.
Comments in Favor of Proposal
The Wine Institute, American Vintners Association, winegrape
growers associations, wine grape growers, wine producers, and wine
wholesalers submitted comments in favor of allowing continued use of
``Gamay Beaujolais'' on American wine labels. However, many of these
commenters took issue with some of ATF's proposals.
Some commenters suggested that the designation ``Gamay Beaujolais''
had lost any varietal significance, and it should not be restricted to
wines made from Pinot noir or Napa Gamay grapes. Thus, for example, the
American Vintners Association suggested that any light, red, young,
fruity wine should be allowed the designation ``Gamay Beaujolais'' as
long as the actual grape variety is shown on the label.
The vast majority of comments received by ATF came from
wholesalers, vineyard proprietors, and wineries who supported the
recognition
[[Page 16482]]
of ``Gamay Beaujolais'' in the regulations. However, these commenters
opposed ATF's proposal that a wine labeled with the designation ``Gamay
Beaujolais'' must derive 75 percent of its volume from either the Napa
Gamay or Pinot noir grape variety. The comments noted that the
longstanding industry practice was to blend the two grape varieties in
the production of ``Gamay Beaujolais'' wine, and that the blend of the
two distinct grape varieties should be considered as meeting the 75
percent requirement found in the regulations.
Most of the comments in favor of allowing a blend of Pinot noir and
``Napa Gamay'' grapes also brought up the issue of whether varietal
percentages should be required on the label. ATF did not propose such a
requirement in Notice No. 793, because the regulations at Sec. 4.23 do
not require a listing of percentages where 75 percent of the wine is
derived from a single grape variety. However, under Sec. 4.23(d),
percentages must be listed on the label whenever two or more grape
varieties are used as the type designation for a wine.
The commenters who raised this issue were opposed to listing the
percentage of grape varieties on the label. Instead, they suggested
that the varietal names ``Pinot noir'' and ``Napa Gamay'' be listed on
the label in descending order by volume, without requiring that the
percentages be shown. The Wine Institute suggested that this option
would allow ``the broadest amount of winemaking flexibility in
achieving the Gamay Beaujolais style and minimizing consumer confusion
that could result from a multiple varietal label.''
While many commenters in favor of retention of the term ``Gamay
Beaujolais'' stated that consumer recognition of this wine was good,
none of the comments offered specific evidence, such as consumer
surveys, on what consumers understood to be the varietal significance
of the term. The Wine Institute submitted a label dating back to at
least 1950, showing that the use of this name on American wine labels
went back several decades, and submitted evidence tending to show that
consumers had positive views about ``Gamay Beaujolais'' wines. However,
some of this evidence actually tended to support the conclusion that
some American consumers consider ``Gamay Beaujolais'' to be a style of
wine similar to French Beaujolais wines. This evidence did not support
ATF's premise in Notice No. 793 that American consumers were aware that
wines labeled as ``Gamay Beaujolais'' were made from Pinot noir or
Valdiguie grapes.
Comments in Opposition to Use of Gamay Beaujolais
Of the 26 comments received in opposition to the continued use of
Gamay Beaujolais on wine labels, 13 were from importers and 4 from
foreign producers-exporters. The remaining 9 comments are discussed in
more detail below.
Most of these commenters strongly opposed the use of ``Gamay
Beaujolais'' on American wine labels, stating that American wineries
were continuing to use the term because they wanted to take unfair
advantage of the Beaujolais name. Secondly, these commenters believed
that use of the term ``Gamay Beaujolais,'' even when modified with a
geographical appellation of origin and a varietal type designation, was
highly misleading and confusing to consumers, since it was being used
to describe a wine that was not made from Gamay grapes, and did not
originate in Beaujolais, France. However, like the comments supporting
the proposal, none of the opposing comments provided specific evidence,
such as consumer surveys, on the consumer's perception of the term.
Finally, it was argued that continued use of the term ``Gamay
Beaujolais'' on American wine labels constituted a violation of ATF
regulations and the United States Government's commitment to prevent
any erosion of protected appellations of origin.
The Delegation of the Commission of the European Communities (now
the European Union) commented that the proposal would confuse and
mislead consumers, since it allows ``the use of the optional
designation `Gamay Beaujolais' for wine which is recognized by BATF as
originating neither from a true `Gamay' grape variety nor from the
`Beaujolais' area of France.'' Their comment also argued that any
recognition of the designation ``Gamay Beaujolais'' for American wines
would violate Item III of the Exchange of Letters between the EC and
the United States dated July 26, 1983, as well as provisions of the
Uruguay Round Agreement on Trade Related Aspects of Intellectual
Property (TRIPS). This argument was based on the premise that the
proposed rule would erode protection of the nongeneric designation
``Beaujolais.'' Instead, the comment suggested implementing the
shortest possible transition period for allowing the term pending its
outright prohibition. The Comite Vins, the European Community
association representing the Community's entire wine industry and
trade, and the Federation des Exportateurs de Vins et Spiritueux de
France (FEVS) filed similar comments in opposition to the proposed
rule.
The Agricultural Attache from the French Embassy also made similar
arguments, and suggested that the proposed rule would essentially
create a new semigeneric designation to the detriment of a French
appellation of origin already recognized by U.S. regulations.
Separate comments from the Union Viticole du Beaujolais
(representing French Beaujolais growers) and the Federation Des
Syndicats de Negociants-Eleveurs de Grande Bourgogne (representing
Beaujolais and Burgundy wine merchants) strongly opposed the proposed
rule as misleading to consumers and in violation of U.S. international
commitments.
A comment on behalf of the Deutscher Weinfonds (DW), stated that
while the DW had no direct interest in this matter, it felt strongly,
``as a matter of principle, that distinctive geographical designations,
and distinctive grape varietals, particularly those recognized by BATF
in its regulations, should in no way be diluted or compromised.''
The National Association of Beverage Importers, Inc. (NABI), a
trade association representing importers of wine, beer, and distilled
spirits, filed a comment representing the views of the majority of its
members. NABI stated that the Brown-Forman Beverage Company and
Heublein, Inc. did not agree with its comment. NABI stated that use of
the designation ``Gamay Beaujolais'' in accordance with the proposed
rule was misleading to consumers, since it would be used to designate a
wine produced from grapes which were not Gamay grapes, and since the
product had nothing to do with the protected geographical designation
``Beaujolais.'' NABI argued that the proposed erosion of the term
``Beaujolais'' was in violation of international agreements, as well as
ATF's own regulations, since ``Beaujolais'' is recognized as a
distinctive designation in 27 CFR 4.24(c). NABI recommended that ATF
adopt its earlier proposal to phase out the use of the term over a
five-year period commencing with the publication of the final rule.
Finally, the law firm of Ropes & Gray submitted a comment on behalf
of its clients the Institut National des Appellations d'Origine
(``INAO'') and the Union Interprofessionelle des Vins du Beaujolais
(``UIVB''). Shortly prior to publication of Notice No. 793, the INAO
and UIVB had petitioned ATF to eliminate recognition of the designation
[[Page 16483]]
``Gamay Beaujolais'' on American wine labels. Their comment in response
to Notice No. 793 argued that recognition of ``Gamay Beaujolais'' as a
labeling term would erode the protection of the distinctive designation
``Gamay Beaujolais,'' and would essentially create a new semigeneric
wine designation. The INAO and UIVB argued that there is no objective
evidence that establishes that consumers are not misled by use of the
labeling designation ``Gamay Beaujolais.'' They suggested that even if
an accurate appellation of origin and varietal designation appeared on
the label in conjunction with the designation ``Gamay Beaujolais,''
consumers might still erroneously believe that the wine is made from a
combination of, for example, Pinot noir and Gamay grapes, or that
consumers will still be misled into believing that the wine is similar
to French Beaujolais wines.
The INAO and UIVB also argued that ATF's recognition of the name
``Gamay Beaujolais'' is in violation of the international obligations
of the United States, and stated that such recognition would undermine
the protection accorded the distinctive name ``Beaujolais,'' and create
a new semigeneric name.
Discussion of Comments
In Notice No. 793, ATF proposed the continuance of the name ``Gamay
Beaujolais'' on American wine labels, premised on the belief that
American consumers had come to associate this term with a wine made
from Pinot noir and Valdiguie (``Napa Gamay'') grapes. ATF recognized
that the use of this term to designate these grapes arose from an
initial classification error; however, ATF reasoned that if consumer
recognition of the term was based on its new secondary meaning in the
United States, then the term would not mislead the American consumer if
used in direct conjunction with an appellation of origin, as well as a
varietal type designation. Thus, the most important issue in
determining whether the regulations should continue to authorize use of
the name ``Gamay Beaujolais'' on American wine labels was whether
American consumers were aware that the term has a secondary meaning
referring to wines made from Pinot noir and Valdiguie grapes.
Many of the commenters in opposition to Notice No. 793 challenged
ATF's assumption that consumers understood the true varietal basis of
``Gamay Beaujolais'' wines. While the commenters in favor of continuing
the use of ``Gamay Beaujolais'' stated that there was good consumer
recognition of the term, they did not provide evidence that many
American wineries had voluntarily disclosed the true grape varieties in
``Gamay Beaujolais'' wines on the label. Without this labeling
information, the fact that the designation had appeared on American
wine labels for decades did not establish that consumers knew that the
wines were actually made from Pinot noir or Napa Gamay grapes.
Upon careful consideration of the comments, ATF has concluded that
none of the commenters were able to provide any competent and reliable
consumer perception evidence showing that the average American consumer
was knowledgeable enough to recognize that ``Gamay Beaujolais'' was a
wine made from the Pinot noir and ``Napa Gamay'' grape varieties. In
fact, some of the commenters in favor of the proposed rule (such as the
American Vintners Association) actually took a contrary position on
this matter, and argued that American consumers did not associate
``Gamay Beaujolais'' with a particular grape variety or varieties.
These commenters suggested that the American consumer actually
associated the designation ``Gamay Beaujolais'' with a style of wine
making.
While the comments (of both those supporting and opposing the
proposal) did not provide direct evidence of consumer understanding of
the varietal significance of the term ``Gamay Beaujolais,'' ATF
believes that there is a legitimate basis for its belief that the wine
industry and knowledgeable consumers associate the term with a wine
produced from Pinot noir and/or Valdiguie (``Napa Gamay'') grapes. It
is ATF's understanding that the term ``Gamay Beaujolais'' is not used
to designate French Beaujolais wines or other French wines made from
Gamay noir grapes. While wine experts thus immediately know that the
term ``Gamay Beaujolais'' is used to refer to a wine which is not made
from Gamay grapes, it is not apparent whether the average American
consumer is as knowledgeable on this issue. For example, in Jancis
Robinson's Vines, Grapes, and Wines, (Alfred A. Knopf, New York 1986)
at 227, under the listing of ``Gamay Beaujolais,'' the true meaning of
this name is explained in a forthright manner, although the author goes
on to state that ``these facts are not widely known among ordinary wine
drinkers.''
Because the comments did not shed much light on the issue of
consumer perception, ATF reviewed articles in the popular press to see
whether these articles provided consumers with accurate information
about the identity of ``Gamay Beaujolais'' wines. Many of these
articles indicated that knowledgeable wine writers were aware of the
varietal composition of ``Gamay Beaujolais'' wines. For example, an
article by Gerald Boyd in the July 15, 1992 edition of the San
Francisco Chronicle entitled ``Lighten Up with Young Gamays and
Pinots'' states that ``[l]ong thought the true grape of Beaujolais,
Gamay Beaujolais is in fact a clone of Pinot Noir.'' Frank Prial of the
New York Times stated as follows in an article entitled ``Wine Talk''
dated January 16, 1991: ``Gamay beaujolais and Napa gamay are fairly
popular California grapes, but neither is actually gamay; gamay
beaujolais is an inferior clone of the pinot noir grape, and Napa gamay
is probably a little-used grape from the South of France called
valdiguie.''
These examples reflect that there is a fairly widespread knowledge
among knowledgeable wine writers that ``Gamay Beaujolais'' wines are
not made from Gamay noir grapes. On the other hand, some of these
articles suggested that the labeling of these wines was confusing. For
example, in the March 28, 1990 edition of the Washington Post, in an
article entitled ``All-American Beaujolais,'' Ben Giliberti explained
the true identity of the ``Gamay Beaujolais'' and ``Napa Gamay''
grapes, and then stated ``Regardless of grape variety, most domestic
bottlings are labeled gamay beaujolais--a confusing situation that one
hopes will be rectified by labeling authorities in the near future.''
In an article entitled ``French Beaujolais Needn't Fear that California
Clone,'' in the July 18, 1991 edition of the Atlanta Constitution,
writer Bruce Galphin explains that ``it has been widely known for years
that gamay Beaujolais is a clone (mutated form) of pinot noir'' but
also states that the situation is ``confusing to Americans learning
about wine.''
Conclusion
After carefully reviewing the comments, as well as commentary by
wine experts such as Jancis Robinson, and articles in the popular press
such as the ones cited above, ATF has concluded that the industry and
wine experts understand the term ``Gamay Beaujolais'' to have varietal
significance when used on American wine labels, even though the term
initially arose from a classification error. However, ATF has concluded
that while the term has thus acquired a secondary meaning in the United
States to refer to a wine made from Pinot noir and/or ``Napa Gamay''
grapes, the average consumer
[[Page 16484]]
may not understand this varietal significance of the term unless
additional information is provided. Thus, ATF has concluded that the
unqualified use of the term ``Gamay Beaujolais'' on wine labels may
tend to mislead consumers as to the varietal identity of the wine.
In Notice No. 793, ATF proposed permanently to allow use of the
term ``Gamay Beaujolais'' in conjunction with a true varietal
designation--either Pinot noir or Valdiguie (``Napa Gamay''). However,
there were several good points that were raised in opposition to this
proposal. Several commenters suggested that ATF was merely codifying a
historical error, and that erroneous varietal designations should not
be allowed merely because such designations were supplemented with
additional truthful information. The INAO and UIVB suggested that the
juxtaposition of the term ``Gamay Beaujolais'' with ``Pinot noir,'' for
example, might further confuse the consumer, and mislead the consumer
into believing that the wine was a blend of ``Gamay Beaujolais'' and
Pinot noir grapes.
ATF has reevaluated its proposal in light of these comments. While
ATF still believes that the name ``Gamay Beaujolais'' has consumer
recognition in the United States, we also recognize that it is not the
correct name for these two grape varieties, and that the average
consumer should not be expected to have technical knowledge about grape
classification issues in order to understand a wine label.
Since the establishment of the Winegrape Varietal Names Advisory
Committee in 1982, it has been ATF's goal to eliminate the use of
incorrect grape variety names in the labeling of American wines, even
where those names have been used on a longstanding basis in the United
States. The final rule on varietal names eliminated the usage of many
names that had been used in the United States for a long time, where
those names did not accurately reflect the recognized names of the
grape varieties in question. See T.D. ATF-370 (61 FR 522). This same
logic dictates that use of the name ``Gamay Beaujolais'' should be
phased out in the United States.
Thus, ATF has decided that the regulations should not provide
permanent recognition of the labeling designation ``Gamay Beaujolais.''
The original classification and naming errors made with respect to the
``Gamay Beaujolais'' (Pinot noir) and ``Napa Gamay'' (Valdiguie )
grapes should not be compounded by allowing the name ``Gamay
Beaujolais'' to be used indefinitely to designate wines made from two
separate grape varieties, neither of which is a true Gamay grape. The
purpose of the rulemaking project on varietal names was to rectify the
errors made in the past with respect to classification of American wine
grape varieties, and to ensure that American consumers were not misled
as to the true identity of American varietal wines. This is all the
more important since varietal names have assumed increasing importance
in the marketing of wines.
Accordingly, ATF has decided that it will terminate recognition of
the labeling designation ``Gamay Beaujolais'' within 10 years. During
this phase-out period, interim labeling requirements will ensure that
consumers are adequately informed as to the varietal content of the
wine. ATF has concluded that it is necessary to allow a period of time
in which wineries can continue to use the labeling designation ``Gamay
Beaujolais,'' as long as this designation is qualified in a manner that
will allow consumers to be educated as to what the varietal
significance of the term really is.
Interim Labeling Requirements
This final rule provides that ATF will temporarily recognize the
name ``Gamay Beaujolais'' as a type designation of varietal
significance. This means that the name has varietal significance, but
it does not fit the requirements for a varietal designation. In this
case, the name is used to designate a wine where not less than 75
percent of the volume of the wine is derived from Pinot noir grapes,
Valdiguie (``Napa Gamay'') grapes, or a combination of both.
As previously explained, Sec. 4.28, relating to type designations
of varietal significance, did not exist in 1994, at the time Notice No.
793 was published. Upon consideration of the comments received in
response to this notice and the regulatory structure adopted as a
result of the varietal name rulemaking, ATF has determined that the
type of wine described as Gamay Beaujolais is a better fit in
Sec. 4.28, rather than as a separate class and type designation in
Sec. 4.34.
ATF will allow a period of 10 years from the issuance of this final
rule for wineries to phase out the use of the term ``Gamay
Beaujolais.'' To the extent that consumers have formed a loyalty to or
preference for the wine that they know as ``Gamay Beaujolais,'' this
transition period will allow them time to learn more information about
the varietal content of the wine. It will also allow wineries and grape
growers time to make any necessary changes in their planting and
marketing plans.
Pursuant to the existing regulations, an appellation of origin must
also appear in direct conjunction with any type designation of varietal
significance. This will ensure that consumers are not misled as to the
origin of the wine. However, ATF also believes that some further
information on the label is necessary in order to ensure that the
consumer is not misled as to the varietal content of the wine. These
requirements will be discussed in further detail below.
Interim Definition of ``Gamay Beaujolais''
In Notice No. 793, ATF proposed that the designation ``Gamay
Beaujolais'' could only be used where the wine met the requirements for
use of either the Pinot noir or Valdiguie (``Napa Gamay'') varietal
designation. In that case, the designation would have to be qualified
by the use of a single varietal designation, signifying that 75 percent
of the wine was derived from either Pinot noir or Valdiguie (``Napa
Gamay'') grapes. However, the comments received from American
wholesalers, growers of Pinot noir and Valdiguie grapes, and American
wineries who produced ``Gamay Beaujolais'' wines were overwhelmingly
opposed to this proposal. These comments pointed out that it had been
ATF's longstanding policy to allow the Pinot noir and Valdiguie grape
varieties to be combined to make up the regulatory 75 percent
requirement. Many comments stressed that it was important for wineries
to have the flexibility to adjust percentages in order to arrive at the
most desirable blend. For example, the California Association of
Winegrape Growers stated that restricting the term to only one of these
grape varieties would ``unduly restrict(s) the winemakers ability to
creatively blend to consumer taste.''
Since the use of the term ``Gamay Beaujolais'' is being phased out
over the next 10 years, and since the comments establish that the term
is well recognized in the wine industry as referring to wines made from
a combination of Pinot noir and Valdiguie (``Napa Gamay'') grapes, ATF
has decided to define the term in a way that incorporates the status
quo over the past several decades. Thus, ATF is defining the term
``Gamay Beaujolais'' to mean an American wine which derives at least 75
percent of its volume from Pinot noir grapes, Valdiguie grapes, or a
combination of both. However, since the term will refer to a blend of
two separate unrelated grape varieties, ATF believes that it is all the
more important to ensure that there is sufficient
[[Page 16485]]
information on the brand label, in direct conjunction with the
designation ``Gamay Beaujolais'' to ensure that consumers are not
misled as to the varietal content of the wine. These requirements are
discussed below.
It should be noted that there were a few comments questioning ATF's
exclusion of wines made with true Gamay noir grapes from the definition
of ``Gamay Beaujolais.'' The evidence clearly indicates that American
``Gamay Beaujolais'' wines have been made from grapes that were not
true Gamay grapes. In T.D. ATF-370, ATF noted that it was listing the
true Gamay grape as ``Gamay noir,'' in order to distinguish it from
other wines which were labeled ``Gamay'' in the past. 61 FR 532. The
true Gamay grape is a relative newcomer to the United States, and there
is no reason to create any confusion between the wine known as ``Gamay
Beaujolais'' and wines made from the true ``Gamay noir'' grape.
Accordingly, wineries producing wines from the true Gamay noir grape
and meeting the applicable percentage requirements for use of a single
varietal type designation, may designate their wines as ``Gamay noir''
but not as ``Gamay Beaujolais.''
Finally, wineries producing wine that meets the requirements for a
single varietal designation of either Pinot noir or Valdiguie (``Napa
Gamay'') may of course choose to use these varietal designations in
lieu of the type designation ``Gamay Beaujolais.'' However, in
accordance with the regulations at Sec. 4.23, the name ``Napa Gamay''
will no longer be accepted for wines bottled on or after January 1,
1999; instead, the varietal name ``Valdiguie'' must be used to
designate these wines.
Interim Labeling Statements
The final rule will allow the use of the ``Gamay Beaujolais''
designation where there appears on the brand label, in direct
conjunction therewith, the names of the grape variety or grape
varieties used to satisfy the regulatory definition of ``Gamay
Beaujolais'' (i.e., Pinot noir and/or Valdiguie). These varietal names
must appear on a separate line from the ``Gamay Beaujolais''
designation, and must be separated from ``Gamay Beaujolais'' by the
required appellation of origin. Where two varietal names are listed,
they shall appear on the same line, in order of predominance.
The appellation of origin shall appear either on a separate line
between the name ``Gamay Beaujolais'' and the grape variety name(s), or
on the same line as the grape variety name(s) in a manner that
qualifies the grape variety name(s). Furthermore, the following
statement shall also appear on the brand or back label: ``Gamay
Beaujolais is made from at least 75 percent Pinot noir and/or Valdiguie
grapes.''
In Notice No. 793, ATF proposed a rule that would allow the name
``Gamay Beaujolais'' only where the wine met the standards for use of
either the Pinot noir varietal designation, or the Valdiguie (``Napa
Gamay'') varietal designation, and where the type designation ``Pinot
noir'' or Valdiguie (``Napa Gamay'') appeared in direct conjunction
with the designation ``Gamay Beaujolais.'' As previously discussed, ATF
has now concluded that during the 10-year phase-out period, it is
reasonable to allow the existing industry practice of blending Pinot
noir and ``Napa Gamay'' grapes to make up the 75 percent requirement
for use of the ``Gamay Beaujolais'' designation. This is in accordance
with the longstanding trade practice and industry understanding of the
term ``Gamay Beaujolais,'' as well as the longstanding policy of ATF
and its predecessor agency.
However, since the term ``Gamay Beaujolais'' is now being defined
to include a blend of two separate grape varieties, ATF believes that
it is necessary to require more than just the appearance of one or two
grape varieties on the brand label, in direct conjunction with the
designation ``Gamay Beaujolais.'' The INAO and UIVB suggested that the
use of two names such as ``Gamay Beaujolais'' and ``Pinot noir'' on a
brand label might confuse consumers into believing that these two names
represented separate grape varieties which had gone into the wine. ATF
believes that this comment has merit. In other words, ATF is concerned
that the appearance of the designations ``Gamay Beaujolais,'' ``Pinot
noir,'' and ``Valdiguie'' together on a brand label might confuse some
consumers, and tend to create a misleading impression that these three
names each represented grape varieties that had been used in the
production of the wine.
Thus, the final rule will require that the varietal designations
Pinot noir and/or Valdiguie appear on the brand label in direct
conjunction with the designation ``Gamay Beaujolais,'' but on a
separate line from ``Gamay Beaujolais,'' and separated from ``Gamay
Beaujolais'' by the required appellation of origin. The appellation of
origin shall appear either on a separate line between the name ``Gamay
Beaujolais'' and the grape variety name(s), or on the same line as the
grape variety name(s) in a manner that qualifies the grape variety
name(s). This will ensure that the consumer is not misled into
believing that Gamay Beaujolais represents just one of two or three
grape varieties used in producing the wine.
Where the wine is made from both Pinot noir and Valdiguie grapes,
the two grape varieties shall appear on the same line, in order of
predominance. Below are four examples of type designations on brand
labels that will be allowed under the requirements of the final rule:
GAMAY BEAUJOLAIS, 1992 CALIFORNIA, PINOT NOIR/VALDIGUIE
GAMAY BEAUJOLAIS, NAPA VALLEY VALDIGUIE
1994 GAMAY BEAUJOLAIS, SONOMA COUNTY PINOT NOIR
GAMAY BEAUJOLAIS, CALIFORNIA, VALDIGUIE & PINOT NOIR
This requirement should leave no room for confusion on the part of the
consumer as to the varietal content of the wine.
Additional Labeling Statement
Notwithstanding the above, ATF believes that because ``Gamay
Beaujolais'' wines are in something of a unique category, the consumer
should be provided with more specific information as to the meaning of
this designation. The vast majority of comments received in response to
Notice No. 794 were in opposition to any requirement that grape variety
percentages be listed on labels. These commenters cited the need for
flexibility in the blending of grapes. ATF recognizes that if the
regulations require wineries to list the percentage of each grape
variety used in the blend, wineries will have to obtain new labels, as
well as new certificates of label approval, for each different blend of
``Gamay Beaujolais'' wine.
In response to these comments, ATF is not requiring wineries to put
grape percentages on the brand label, as they would be required to do
if the wine were labeled with more than one grape variety under section
4.23(d). ATF recognizes that the Gamay Beaujolais designation is not a
multiple varietal designation, but is instead a type designation of
varietal significance, which is indicative of a certain varietal
content. The regulations will define what that varietal content is, and
knowledgeable industry members and consumers are already aware of these
requirements.
However, in order to ensure that consumers are more specifically
informed as to the varietal significance of the term ``Gamay
Beaujolais,'' the final rule will require the following statement to
appear on the brand or back label: ``Gamay Beaujolais is made from at
least 75 percent Pinot noir and/
[[Page 16486]]
or Valdiguie grapes.'' ATF believes that this statement adequately
informs the consumer as to the traditional meaning of the term ``Gamay
Beaujolais'' as used on American wine labels for the past several
decades. Wineries may use this statement without having to receive new
certificates of label approval each time the percentages of grape
varieties in their blends change.
ATF believes that these new requirements will ensure that during
the period of the phase-out, consumers will be adequately informed
about the varietal content of the wine. Furthermore, ``Gamay
Beaujolais'' wines will continue to be labeled with an appellation of
origin to ensure that consumers are adequately informed as to the
origin of the grapes. ATF believes that knowledgeable consumers are
already on notice that ``Gamay Beaujolais'' wines are not made from the
``Gamay noir'' grape. The interim labeling requirements will, however,
help to educate all consumers as to the meaning of the term ``Gamay
Beaujolais,'' and ensure that consumers have sufficient information as
to what that term means.
Length of Phase-Out Period
Since ATF did not specifically propose the option of phasing out
use of the name ``Gamay Beaujolais'' in Notice No. 793, we did not
solicit comments on the issue of the appropriate length of a phase-out
period. However, when ATF first proposed to phase out use of this term
in 1986, many wineries and grape growers suggested that this proposal
would impose an undue economic burden on growers of Napa Gamay grapes.
It was suggested that American consumers had come to know the term
``Gamay Beaujolais'' as referring to a particular type of wine, and
that the market for this wine would be severely impacted if it were not
labeled under the ``Gamay Beaujolais'' designation.
ATF's statutory mandate under the FAA Act is to regulate the use of
terms on wine labels so as to avoid misleading the consumer. ATF
recognizes that wineries who produce ``Gamay Beaujolais'' wines may
have to make some marketing and labeling changes in connection with the
phasing out of this term. ATF also recognizes that some wineries may
have relied upon ATF's previous recognition of this term in making
economic decisions regarding the planting of grapes and the marketing
of wines. Many of the commenters to Notice No. 581 suggested that a 5-
year phase-out period would impose an undue economic burden on growers
and wineries, due to the necessary adjustments with respect to planting
and marketing decisions. Although a phase-out was not even proposed in
Notice No. 793, ATF received one comment from a grape grower discussing
the substantial investment in ``Napa Gamay'' grapes, and the cost and
time that is involved in replanting vineyards.
Accordingly, ATF has decided to allow the use of the term ``Gamay
Beaujolais'' on wine labels for 10 years from the date of publication
of this final rule. On the one hand, wineries and grape growers have
been on notice since the formation of the Advisory Committee in 1982
that the continued use of the name ``Gamay Beaujolais'' was in doubt.
Thus, even though ATF did not specifically propose a phase-out in
Notice No. 793, that issue has certainly been aired sufficiently to put
all interested parties on notice that the future of the designation
``Gamay Beaujolais'' was uncertain.
On the other hand, since ATF proposed to continue to allow the use
of this name in 1994, many domestic wineries may have relied upon this
proposal in deciding to continue production of this wine, as have grape
growers in the cultivation of the grapes used to make this wine. ATF
wants to ensure that any such wineries and grape growers are given
sufficient time to make any necessary changes required by this final
rule. Many comments to the 1986 notice expressed concern that the
market for ``Napa Gamay'' grapes would be severely affected by the
elimination of the ``Gamay Beaujolais'' designation. ATF believes a
reasonable phase-out period is necessary to avoid these economic
consequences.
Accordingly, American wineries may continue to use this term for a
period of ten years, subject to the requirements previously discussed,
in order to afford them adequate time to make any necessary changes in
the marketing of their wines and the planting of their vineyards. ATF
believes that this interim position will ensure that consumers who read
the label will not be misled as to the true varietal composition or
geographic origin of the wines in question. In fact, the interim rule
will ensure that American consumers receive a great deal of information
as to the meaning of the term ``Gamay Beaujolais'' on American wine
labels. By the end of the ten-year period, consumers who enjoy ``Gamay
Beaujolais'' wines will have sufficient information about the product
that they will be able to make an educated choice about the product
once the labeling terminology changes.
Effective Date
The regulatory definition of ``Gamay Beaujolais'' as a type
designation of varietal significance, which essentially codifies the
past agency practice on this issue, will take effect May 7, 1997. Since
this definition does not involve any change in past administrative
practice, ATF does not believe that the new definition, in and of
itself, will necessitate any labeling changes.
However, the new requirements imposed by the final rule with
respect to additional information on labels will necessitate labeling
changes. These requirements are effective for wines bottled on or after
January 1, 1999. This will provide wineries with ample time to make any
necessary changes to the labeling of ``Gamay Beaujolais'' wines.
Furthermore, this effective date will coincide with the date on which
the name ``Napa Gamay'' will no longer be authorized on wine labels.
Pursuant to T.D. ATF-370, the name ``Napa Gamay'' is listed as a
synonym for the prime name ``Valdiguie;'' however, the name ``Napa
Gamay'' may only be used for wines bottled prior to January 1, 1999.
Since this final rule will require wineries to make changes to existing
labels, ATF believes that it would be unduly burdensome to require
industry members to change their labels twice. Accordingly, the final
rule will allow wineries to begin compliance with the interim labeling
requirements for ``Gamay Beaujolais'' at the same time that the term
``Napa Gamay'' must be phased out.
Geographic Name Issues
ATF would like to clarify that it does not agree with those
commenters who suggested that use of the ``Gamay Beaujolais''
designation is misleading as to the origin of the wine, or that ATF's
prior or interim policy with respect to this name is in violation of
the international obligations of the United States.
Two separate issues were raised with respect to the incorporation
of the geographic name ``Beaujolais'' into the designation ``Gamay
Beaujolais.'' On the one hand, as previously noted, commenters opposed
to the use of ``Gamay Beaujolais'' and commenters in favor of the use
of ``Gamay Beaujolais'' have separately suggested that recognition of
this term would constitute the authorization of a new semigeneric
designation for American wines. Commenters opposed to use of the term
``Gamay Beaujolais'' have also suggested that use of the term is in
violation of the FAA Act and its implementing regulations, because the
[[Page 16487]]
United States has already recognized the term ``Beaujolais'' as a
nongeneric distinctive designation for wines, and thus the term
``Beaujolais'' may not appear anywhere on the label of a wine
originating anywhere outside of Beaujolais, France. These issues will
be addressed separately.
Regulations
ATF regulations at 27 CFR 4.24 provide several different categories
of names of geographic significance. Section 4.24(a) provides that
certain names, such as Vermouth and Sake, are generic names which
originally had geographic significance, but which are also designations
of a class or type of wine. Such names may be used to label wines
coming from any geographic area.
Section Sec. 4.24(b) also establishes semigeneric names of
geographic significance which are also designations of a class or type
of wine. Semigeneric designations may be used to designate wines of an
origin other than that indicated by the name only if there appears in
direct conjunction an appropriate appellation of origin disclosing the
true place of origin of the wine, and if the wine so designated
conforms to the standard of identity, if any, for such wine contained
in the regulations, or to the trade understanding of such class or
type. Examples of semigeneric names which are also type designations
are burgundy, champagne, and sherry.
Finally, Sec. 4.24(c) provides that if a name of geographic
significance has not been found by the Director to be generic or
semigeneric, it may be used only to designate wines of the origin
indicated by such name. Furthermore, if the Director finds that such a
name is known to the consumer and to the trade as the designation of a
specific wine of a particular place or region, distinguishable from all
other wines, then the name shall be deemed a distinctive designation of
a wine. The names ``American'' and ``French'' are nongeneric names that
are not distinctive designations of specific grape wines. The names
``Bordeaux Blanc'' and ``Medoc'' are nongeneric names that are also
distinctive designations of specific grape wines.
In 1990, ATF issued a new part 12 in the regulations, listing
examples of foreign nongeneric names of geographic significance. In
keeping with the policy of the past several decades, the name
``Beaujolais'' was recognized as a foreign nongeneric name of
geographic significance which has also been recognized as a distinctive
designation of a specific grape wine. See 27 CFR 12.31(b).
Semigeneric Name Issue
The name ``Beaujolais'' has long been recognized by the United
States as a nongeneric name that is also a distinctive designation of a
specific grape wine. This means that the name ``Beaujolais,'' standing
alone, can only be used to designate a wine that is produced in
Beaujolais, France. However, certain commenters have suggested that
``Gamay Beaujolais'' has become a semigeneric name that represents that
a wine is made using the same production methods that are used in the
production of Beaujolais wines. The suggestion has thus been made that
ATF should authorize ``Gamay Beaujolais'' as a semigeneric name.
ATF has never sanctioned the use of the name ``Gamay Beaujolais''
as a semigeneric designation. The geographic designation
``Beaujolais,'' standing on its own, is a distinctive designation that
has been recognized by American regulations for decades. There is no
evidence that this term, standing alone, has lost its meaning as a
distinctive, nongeneric geographic designation. To the extent that many
comments in opposition to recognition of the name ``Gamay Beaujolais''
are based on the premise that the name would constitute a new
semigeneric designation, ATF has concluded that such criticism is
unfounded. The incorporation of a geographic name as part of a varietal
designation, or as part of a designation of varietal significance, is
completely different from the recognition of a geographical name in and
of itself as a type of wine which has lost its geographical
significance. If ATF decided to allow the designation ``Beaujolais'' to
appear by itself on labels of wines originating outside of Beaujolais,
France, then that would be a change in the status of the designation
``Beaujolais'' as a nongeneric, distinctive designation of geographic
significance. However, the incorporation of the name ``Beaujolais'' as
part of a varietal designation, or as part of a designation of varietal
significance, does not mean that a new semigeneric designation has been
created. This final rule in no way changes the recognition accorded the
designation ``Beaujolais'' as a nongeneric name under Sec. 4.24(c).
Use of Geographic Names in Varietal Designations
Many comments to Notice No. 793 suggested that the incorporation of
geographic names in varietal designations is somehow in violation of
the regulations governing the use of such geographic names on wine
labels. ATF does not agree with these comments.
Many European geographic terms were originally incorporated into
American varietal names for the purpose of conveying to the American
consumer that these were the same grape varieties that were grown in
the European geographic area referenced by the name. While our
historical records are not clear on this issue, it seems likely that
the distinctive designation ``Beaujolais'' was allowed as part of the
original ``Gamay Beaujolais'' designation only as a descriptive term
similar to ``French Colombard'' or ``Johannisberg Riesling.'' In other
words, it was meant to convey one meaning--that this was the same
``Gamay'' grape as was grown in Beaujolais, just as the ``French
Colombard'' was the same Colombard grape grown in France, and the
``Johannisberg Riesling'' was the same Riesling grape grown in
Johannisberg.
It should be noted that ATF has never taken the position that the
incorporation of a geographic name in a varietal name is contrary to
the regulations in Sec. 4.24 which govern the use of names of
geographic significance. For example, Sec. 4.24(c)(2) specifically
recognizes that the word ``French'' is a nongeneric name; it cannot be
used on a wine label to designate a wine that originates outside of
France. However, ``French Colombard'' is different from the single word
``French,'' in the same way that ``Gamay Beaujolais'' is different from
the single word ``Beaujolais.'' Thus, ATF does not agree with those
commenters who suggested that ATF would be violating its own
regulations by authorizing the use of a name of varietal significance
that incorporated the name of a distinctive designation. The
incorporation of a geographic name as part of a varietal name or a
designation of varietal significance is different from the use of that
same geographical name standing alone on a wine label.
When ATF first proposed the establishment of Part 12, to list
examples of foreign nongeneric names of geographic significance, it
took the position that certain foreign denominations of origin that
were identical to or similar to American grape varietal designations
should not be published as examples of nongeneric names. When ATF
promulgated these regulations in T.D. ATF-296, however, we concluded as
follows:
After consideration of the comments, ATF agrees that names of
bonafide geographically demarcated areas or names which are used to
designate a wine product from a particular country should be
recognized as nongeneric
[[Page 16488]]
even if they are similar or identical to varietal names. In this
regard, ATF believes that any potential for consumer confusion
concerning the origin of the wine is obviated by the fact that the
wine labeling regulations provide that the names of grape varieties
may be used as a type designation of a wine only if the wine is also
labeled with an appellation of origin. 27 CFR 4.23a. In addition,
any questions concerning the potential for consumer confusion as to
the identity of the wine that may arise when a foreign nongeneric
name is similar or identical to a varietal name will be resolved by
ATF on a case-by-case basis.
55 FR at 17966
This same issue was presented when various foreign producers and
governments objected to the use of foreign geographical terms in
American grape varietal names. In T.D. ATF-370, ATF specifically
rejected any blanket prohibition of foreign geographical terms in grape
variety names, stating that it had already announced in Notice No. 749
that ``there is no reason to deny use of a grape variety name to
American winemakers simply because that name bears a resemblance to a
foreign name of geographic significance.'' 61 FR at 534. ATF noted that
the requirement to use an appellation of origin in direct conjunction
with a grape variety name would prevent confusion between an American
varietal wine and a wine labeled with a foreign appellation of origin.
Finally, ATF restated its position that ``any questions concerning the
potential for consumer confusion as to the identity of wine which may
arise when a foreign geographic term is similar or identical to a
varietal name would be resolved by ATF on a case-by-case basis.'' 61 FR
at 534.
In the final rule on grape variety names, ATF announced that it was
phasing out use of the term ``Johannisberg Riesling,'' since that grape
variety was known by two other names which did not incorporate
geographical references--``Riesling'' and ``White Riesling,'' and these
names were more correct than ``Johannisberg Riesling.'' 61 FR at 530.
On the other hand, since the name French Colombard had become well
known to the American consumer, it was retained as a synonym for the
prime name ``Colombard.'' ATF did not believe that this name would
mislead consumers as to the origin of the wine, as long as an
appellation of origin appeared in direct conjunction with the name, in
compliance with the requirements of Sec. 4.34(b).
When ATF's predecessor agency originally allowed American wineries
to use the name ``Gamay Beaujolais'' on labels, the decision was not
made with the intention to thereby create a new semigeneric designation
or to imply that the wine made from these grapes was somehow the same
as wine coming from Beaujolais, France. Furthermore, since an
appellation of origin has always been required to appear in direct
conjunction with the varietal name, we do not believe that consumers
have been misled about the origin of the wine.
ATF does not agree that it is precluded by the FAA Act or its
implementing regulations from approving the use of a grape varietal
name or a type designation of varietal significance which incorporates
a geographic reference, as long as that name is an accurate designation
for the grape variety, or is a recognized name of varietal
significance, and is known to the consumer. However, we agree that
varietal names and type designations of varietal significance which
incorporate geographic terms must be evaluated on a case-by-case basis
to determine whether there is a potential for consumer confusion. In
the case at hand, since there is no evidence that French wines are
labeled as ``Gamay Beaujolais,'' and since it appears that American
consumers associate this name with American wines, ATF does not believe
that the name causes confusion as to the geographic origin of the wine.
International Issues
It should be noted that while ATF has decided to phase out use of
the name ``Gamay Beaujolais,'' we do not believe that either our past
policy on this issue or our interim policy during the ``phase-out''
period is in violation of the international obligations of the United
States.
The provisions in TRIPS on geographical indications do afford
certain protections for names of wines and distilled spirits in
Articles 22 and 23. However, those protections are subject to the
provisions in Article 24 that address and sanction the continued use of
names in existence on or after the effective dates of the TRIPS
provisions. Article 24(4) states as follows:
Nothing in this Section shall require a Member to prevent continued
and similar use of a particular geographical indication of another
Member identifying wines or spirits in connection with goods or
services by any of its nationals or domiciliaries who have used that
geographical indication in a continuous manner with regard to the
same or related goods or services in the territory of that Member
either (a) for at least ten years preceding the date of adoption of
the Final Act Embodying the Results of the Uruguay Round of
Multilateral Trade Negotiations or (b) in good faith preceding that
date.
Under this paragraph, an industry member that has been using the
designation ``Gamay Beaujolais'' under the prescribed conditions is
entitled to continue that use on the ``same or related'' wines after
the effective date contained in the TRIPS provision. Additionally,
Article 24(6) provides as follows:
Nothing in this Section shall require a Member to apply its
provisions in respect of a geographical indication of any other
Member with respect to goods or services for which the relevant
indication is identical with the term customary in common language
as the common name for such goods or services in the territory of
that Member. Nothing in this section shall require a Member to apply
its provisions in respect of a geographical indication of any other
member with respect to products of the vine for which the relevant
indication is identical with the customary name of a grape variety
existing in the territory of that Member as of the date of entry
into force of the Agreement Establishing the MTO.
This paragraph is not restricted to the continued use by a particular
person or entity. Thus, under the provisions of the first sentence,
since the designation ``Gamay Beaujolais'' is the term customary in the
common language of the United States to describe the wine at issue,
ATF's interim maintenance of the status quo with respect to the
definition of ``Gamay Beaujolais'' wines does not violate TRIPS. It is
also arguable that the second sentence in Article 24(6), which allows
the continued use of grape variety names existing as of January 1,
1995, applies to ``Gamay Beaujolais'' since ATF has determined that
this name is a type designation of varietal significance. Furthermore,
the final rule does not change the definition of ``Gamay Beaujolais''
which has been applied by the agency since well before January 1, 1995.
Finally, even if the general application of Article 24(6) were
disregarded for a moment, the proposal does not contradict the
provision of Article 24(3) which provides that a Member shall not
diminish the protection of geographical indications that existed in
that member immediately prior to the date of entry into force of the
agreement establishing the World Trade Organization. ATF's maintenance
of the status quo constitutes an interim continuance of the existing
practices governing the production of the wine bearing the designation
Gamay Beaujolais. Thus, no protection has been diminished. Accordingly,
ATF's maintenance of the status quo with respect to Gamay Beaujolais is
consistent with the obligations of the United States under the TRIPS
provisions.
[[Page 16489]]
The Wine Accord
Several commenters suggested that the continued use of the
designation ``Gamay Beaujolais'' is contrary to the commitment in Item
III of the United States-European Economic Community Wine Accord of
1983. In relevant part, that item states:
The EEC also notes with satisfaction the willingness of the U.S. to
work within the regulatory framework of 27 CFR Sec. 4.24(c)(3) to
prevent erosion of non-generic designations of geographic
significance indicating a wine-growing area in the EEC.
The United States fulfilled the letter and spirit of this commitment in
the promulgation of 27 CFR Part 12--Foreign Nongeneric Names of
Geographic Significance Used in the Designation of Wines in T.D. ATF-
296, 55 FR 17967, April 30, 1990. Furthermore, at the time the
commitment was made in the Wine Accord of 1983, the use of the
designation ``Gamay Beaujolais'' on wines originating from other than
the Beaujolais region of France was clearly established. Finally, even
if the name ``Gamay Beaujolais'' were considered to be a nongeneric
designation of geographic significance indicating a wine-growing area
in the European Union, nothing in ATF's policy with respect to this
designation erodes the Beaujolais appellation of origin in France since
ATF's actions have merely maintained the status quo use of this
designation, with further restrictions, pending the termination of the
10-year phase-out period. Thus, ATF's actions have not violated the
commitments of the Wine Accord of 1983.
Miscellaneous Labeling Issues
Several commenters suggested that American producers of Gamay
Beaujolais are deliberately trying to create an association between
their wines and French Beaujolais wines by using the descriptive term
``Nouveau'' to modify the designation ``Gamay Beaujolais.'' The term
``Beaujolais Nouveau'' is used to designate the Beaujolais wine first
released from each year's vintage, prior to any aging. French law
prohibits the release of Beaujolais Nouveau wine until the third
Thursday in November of each year, and the release of these wines on
the third Thursday in November is an occasion which receives much
publicity and attention throughout the world.
Commenters such as INAO and UIVB suggested that the promotion of
American ``Gamay Beaujolais Nouveau'' wines, often released on the same
day in November as the French Beaujolais Nouveau wines, is evidence of
an attempt by American wineries to create a false association with true
Beaujolais wines. A comment from Georges Duboeuf, who exports French
Beaujolais wines to the American market, made a similar argument with
respect to the use of the term ``Nouveau'' to describe American Gamay
Beaujolais wines. Mr. Duboeuf suggested that the popularity of French
Beaujolais Nouveau wines had been skyrocketing in the United States,
and that American wineries were trying to ``perpetrate [a] hoax on the
American consumer to improve their sales'' of Gamay Beaujolais wines by
appropriating the term ``Nouveau'' to describe their products. Mr.
Duboeuf stated that ``[w]ine produced in California can never be
Beaujolais Nouveau though they may try to appropriate the name.''
ATF believes that these comments have raised valid issues regarding
individual labels approved by ATF for ``Gamay Beaujolais'' wines. For
example, some wineries have labeling statements that compare their
wines to Beaujolais wines from France. Other wines are labeled as
``Gamay Beaujolais Nouveau,'' in an apparent attempt to create a
comparison to ``Beaujolais Nouveau'' wines.
In general, ATF allows additional information on wine labels that
is truthful, accurate and specific. Thus, it is not misleading for a
winery to truthfully explain the type of production method used to make
the wine at issue. Nor is it generally misleading to use a descriptive
term such as ``Nouveau'' on a wine label. However, ATF will examine
each application for label approval for ``Gamay Beaujolais'' wine
received in the next 10 years to ensure that the label, taken as a
whole, does not create the misleading impression that the wine is
somehow the same as or similar to Beaujolais or ``Beaujolais Nouveau''
wines.
Litigation
It should be noted that on February 21, 1996, the INAO and UIVB
filed a complaint in the United States District Court for the District
of Columbia. The two plaintiffs are organizations chartered under
French law, and they allege that ATF's approval of domestic wine labels
bearing the designation ``Gamay Beaujolais'' is contrary to the FAA Act
and its implementing regulations. Plaintiffs also argue that ATF's
approval of this term violates the international obligations of the
United States. It is ATF's belief that the issues raised by the
plaintiffs have also been raised in the comments submitted in this
rulemaking proceeding, and are comprehensively addressed in this final
rule.
Regulatory Flexibility Act
It is hereby certified that this final rule will not have a
significant economic impact on a substantial number of small entities.
This final rule will allow domestic wineries to continue to use the
labeling designation ``Gamay Beaujolais'' for a period of 10 years,
although additional information on labels will be required. ATF
believes that this phase-out period provides ample time for affected
wineries to make any necessary labeling and marketing changes,
especially in view of the fact that ATF first proposed in 1986 to phase
out use of the name ``Gamay Beaujolais.'' Thus, by the time that the
phase-out period will have expired, American wineries will have had
over 20 years from the first phase-out proposal to make any necessary
adjustments to the labeling and marketing of their wines. Furthermore,
even after use of the name is phased out, wineries will still be able
to produce the same wine, using the Pinot noir and/or Valdiguie
name(s). By that time, consumers will have learned (if they do not
already know) that the name ``Gamay Beaujolais'' has been used to
designate a wine made from Pinot noir and Valdiguie grapes. Presumably,
consumer loyalty to this product will continue even after it is
marketed under a different name. Thus, the final rule will not have a
significant economic impact on a substantial number of small entities.
Accordingly, a regulatory flexibility analysis is not required
because the final rule is not expected (1) to have significant
secondary or incidental effects on a substantial number of small
entities, or (2) to impose, or otherwise cause, a significant increase
in reporting, recordkeeping, or other compliance burdens on a
substantial number of small entities.
Paperwork Reduction Act
The collection of information contained in this final regulation
has been previously reviewed and approved by the Office of Management
and Budget (OMB) in accordance with the requirements of the Paperwork
Reduction Act (44 U.S.C. 3507(d)) under control number 1512-0482. An
agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid
control number assigned by OMB.
[[Page 16490]]
Executive Order 12866
It has been determined that this regulation is not a significant
regulatory action as defined by Executive Order 12866. Accordingly,
this final rule is not subject to the analysis required by this
Executive Order.
Drafting Information
The principal author of this document is Thomas Busey, Wine, Beer
and Spirits Regulations Branch, Bureau of Alcohol, Tobacco and
Firearms.
List of Subjects in 27 CFR Part 4
Advertising, consumer protection, Customs duties and inspections,
Imports, Labeling, Packaging and containers, Wine.
Authority and Issuance
Accordingly, 27 CFR Part 4, Labeling and Advertising of Wine, is
amended as follows:
Paragraph 1. The authority citation for Part 4 continues to read
as follows:
Authority: 27 U.S.C. 205.
Par. 2. Section 4.28 is amended by adding a new paragraph (e) to
read as follows:
Sec. 4.28 Type designations of varietal significance.
* * * * *
(e)(1) Gamay Beaujolais. An American wine which derives at least 75
percent of its volume from Pinot noir grapes, Valdiguie grapes, or a
combination of both.
(2) For wines bottled on or after January 1, 1999, and prior to [10
years from date of publication], the name ``Gamay Beaujolais'' may be
used as a type designation only if there appears in direct conjunction
therewith, but on a separate line and separated by the required
appellation of origin, the name(s) of the grape variety or varieties
used to satisfy the requirements of paragraph (e)(1) of this section.
Where two varietal names are listed, they shall appear on the same
line, in order of predominance. The appellation of origin shall appear
either on a separate line between the name ``Gamay Beaujolais'' and the
grape variety name(s) or on the same line as the grape variety name(s)
in a manner that qualifies the grape variety name(s). The following
statement shall also appear on the brand or back label: ``Gamay
Beaujolais is made from at least 75 percent Pinot noir and/or Valdiguie
grapes.''
(3) The designation ``Gamay Beaujolais'' may not be used on labels
of American wines bottled on or after April 9, 2007.
Signed: February 21, 1997.
John W. Magaw,
Director.
Approved:
Dennis M. O'Connell,
Acting Deputy Assistant Secretary (Regulatory, Tariff & Trade
Enforcement).
[FR Doc. 97-8808 Filed 4-4-97; 8:45 am]
BILLING CODE 4810-31-U