A senate bill that would create the Oregon Winery and Winemakers Task Force was referred to the Ways and Means Committee on Thursday.
Senate Bill 111 was proposed at the request of the Senate Interim Committee on Business and Transportation to ensure winemakers meet certain label or branding criteria. The task force would investigate the laws, administrative rules and policies relating to wine or wine grapes to determine what would provide effective brand protection for Oregon wines and would dissolve Dec. 31 according to the amended bill.
The proposed bill split people in the wine industry throughout the committee process with 18 individuals, business owners and coalitions giving testimony at the work session for the fourth amendment. All five representatives from the Umpqua Valley opposed the bill.
The Southern Oregon Winery Association sent a letter arguing the proposed changes favor winemakers and fail to consider wine growers before the committee made the task force amendment.
“High quality wines made from Oregon fruit by out-of-state wineries has increased market awareness and the overall reputation for quality of Oregon grapes and wines,” association President Scott Steingraber wrote. “The proposed changes however seem to benefit only Oregon winemakers … A solution needs to be found that benefits winemakers, wine grape growers and the Oregon wine industry as a whole.”
The task force would consist of four non-voting members from the Senate and House of Representatives and 20 voting members evenly split between wine grape growers and winemakers in six American Viticultural Areas.
Scott Kelley from Paul O’Brien Winery called the bill a “wolf in sheep’s clothing,” and a “solution in search of a problem.”
“We have existing state and federal laws that protect the Oregon wine industry,” Kelley wrote. “These laws work when enforced (as with the Copper Cane case).”
The Copper Cane case was a complaint against California-based Copper Cane Wine and Provisions which the U.S. Alcohol and Tobacco Tax and Trade Bureau found to violate federal labelling laws with the Elouan and Willametter Journal wines.
“Jim Bernau would like you to believe there is an epidemic of wineries using deceptive labelling to gain a competitive advantage,” Kelley wrote. “This is untrue and purely a ploy to pass legislation that will eliminate competition. One winery utilized creative, but true, marketing and has fixed those labels.”
A continual theme through all the amendments before the task force amendment increased the penalty fee to $25,000 and changes to the grape-tonnage tax, made the Oregon Liquor and Control Commission the authority to create labelling rules, and required the commission review the rules in the next two to five years and compare the rules to complaints received.
Bernau submitted a presentation on labelling laws in Oregon with graphs showing that in order to “preserve identity and create transparency,” the laws are stricter and require wine to be made up of 100% Oregon-grown wine in order to claim Oregon on the label. Federal regulations require 75% to claim any country, state or county.
Wayne Parker from Melrose Vineyards wrote to the committee, saying Bernau would “jeopardize the whole industry.” He said over 50% of the industry was “up in arms” about the bill.
“One man’s overreaching, self-enriching acts can kill an industry that is so valuable to Oregon,” Parker wrote. “We as an industry need all of the buyers we can find and hold onto.”
Teal Stone from Blue Heron Vineyards wrote to the committee, asking that the writers of the bill consider wine grape growers like her 600-acre vineyard that she and her family started planting in 2011.
She said she saw a shift between 2013 and 2015 when the Oregon buyers needed more than she could produce.
“From 2016 until present, there has been a seismic shift in the marketplace and an oversupply that couldn’t be absorbed by Oregon wineries alone,” Stone wrote. “To us it would make the most sense to give Oregon growers, winemakers, and buyers all the incentives and resources possible to continue to grow this industry.”
According to the 2016 Oregon Vineyard and Winery Census, Oregon crushed about 73,000 tons of grapes in 2015, which would make about 4.3 million cases of wine according to estimates for one ton of grapes from Wine Spectator. Oregon sold about three million cases of wine that year, with the difference primarily coming from out-of-state wineries buying the grapes.
In a letter from Copper Cane, the winery with the labelling issues, Vice President of Operations Jim Blumling said the company paid over $15,000 in grape tax in 2018 but doesn’t believe legislation is needed.
“What was once a labeling legislative action has ballooned into an ill-conceived mess of hurdles for out of state vintners,” Blumling wrote. “Out of state vintners are utilizing nearly 40% of Oregon’s fruit and helping grow the Oregon wine market share for the state.”