U.S., EU Clash Over Wine Labeling Rule

YAKIMA, Wash. (AP) -- A classic or vintage American wine?
No such thing in European Union countries, where U.S. wineries have been barred from exporting any wines with labels that include any of a dozen traditional words or phrases to describe the wine or name the winery.
Among them: chateau, classic, fine, noble, ruby, superior, tawny, vintage and clos, which is the French word for closed.
Hundreds of U.S. wineries affected by the new rule now find themselves unable to export to more than 25 EU-member nations unless they have a trademark in that country, and some fear the trademark exception could be repealed later this year.
Keith Love, vice president of communications for the largest winery in Washington, Chateau Ste. Michelle, said the timing couldn't be worse, even if less than 10 percent of the company's wine is exported.
"It's a fairly small slice of our business, but we are growing our export business," he said. "Short term, this is going to hurt us. Long term, this is not good."
European wineries have very strict rules protecting wine descriptions and place names and have long chafed at U.S. vintners' use of geographic terms, such as Champagne.
Under a 2006 agreement, U.S. wineries agreed to stop using such place names in order to be allowed to sell wines in European Union markets, but some wineries already using them were allowed to continue.
Last fall, the European Union terminated provisions of that agreement that allowed other descriptive words, such as chateau and clos, to appear on labels.
In 2008, U.S. wine exports topped $1 billion for the first time, according to the Wine Institute, an industry advocacy group. Nearly half, about $486 million, were shipped to the European Union, and exports to EU countries increased 9 percent in 2008 from the previous year.
A bipartisan group of lawmakers from 10 states, including top wine-producing states of California, Washington, Oregon and New York, on Wednesday urged a U.S. trade representative to resolve the dispute.
"If the European Community's recent action overturning decades-long acceptance of these terms is allowed to stand, these wineries will be required to withdraw brands that have been sold for many years in the European markets," they said. "The loss of these markets will financially harm local businesses in the communities we represent."
Clos du Val, a family-owned winery in California's Napa Valley since 1973, exports about 2,000 cases of its overall 100,000-case volume. Exports are continuing to the United Kingdom, its largest market, under a trademark.
The winery is working to establish or provide documentation of its trademarks in other EU markets, said Mary Ann Vangrin, director of public relations.
"We'll establish our trademark, but I think it's going to be somewhat of a lengthy process," she said.
In the meantime, Vangrin said Clos du Val has been asked to consider changing its name.
"There's no plans to do that at this time," she said.