MEDFORD, Ore. — A Senate bill designed to protect Oregon’s wine industry could be a deal killer for many local wineries that export to California and other states.
“If this bill goes into effect, it’s going to destroy the little guy,” said Jason Atkinson, a former state senator who is representing Oregon wineries opposed to the bill.
Senate Bill 111 was drafted to protect Oregon’s wine industry by adding extra regulatory hurdles for grapes heading out of state, but Atkinson and others worry those regulatory hurdles could scare off out-of-state importers.
The Senate bill was triggered after California company Copper Cane had a dispute with Oregon winemakers and legislators over references to Oregon geographic names and American Viticultural Areas, known as AVAs, in nationwide marketing of its Elouan pinot noirs and other made-in-California wines.
Oregon’s labeling rules are more stringent than the federal standards. Federal rules require 85 percent of the grapes to be from an AVA to qualify it to be listed on the label, but Oregon requires at least 95 percent of the grapes to be from the specific AVA, and the wine must be completely produced within the state.
Copper Cane last year canceled orders for more than 2,000 tons of fruit from about 15 vineyards in the Rogue Valley. The California company claimed it found worrisome levels of “smoke taint” in the fruit caused by exposure to polluted air from summer of fires.
A representative from Copper Cane could not be reached for comment Friday. Copper Cane, under the name Elouan, is one of the largest sellers of pinot noir in the U.S.
Atkinson thinks the bill was drafted as a way to retaliate against Copper Cane, a claim that was denied by the Oregon Winegrowers Association, which has supported the legislation.
“The lobbyists start running with this bill to punch this guy in the eye,” Atkinson said.
The state currently exports 20 percent of the 91,000 tons produced here annually.
Atkinson, who said 65 percent of the wine industry opposes the bill, said the state already produces more fruit than it has storage capacity to handle. If the bill passes, it will put up road blocks preventing the fruit from being sold elsewhere, limiting the amount of storage capacity at larger wineries, he said.
“If the big guys don’t move their fruit, the small guys will have nowhere to put their fruit,” Atkinson said.
Dennis O’Donoghue, who owns Celtic Moon Vineyards in Eagle Point, Ore., said he doesn’t want to see the wine industry damaged by the bill.
“It’s got a lot of people concerned,” he said.
O’Donoghue said Oregon’s existing regulatory system works and doesn’t need fixing. Copper Cane paid the fine and changed its labeling to adhere to Oregon rules.
Tom Danowski, chief executive officer for Oregon Winegrowers Association, said, “There is absolutely no question that there is opposition to the bill.”
His association, which represents one-third of the wine industry, supports the Senate bill, and he thinks that as the bill evolves through the Legislature, it will become more palatable to the wine industry. The bill has passed the Senate and is being studied in the Joint Ways and Means Committee.
One of the provisions of the bill would require out-of-state buyers to pay the same $25-a-ton tax on grapes that Oregon winery owners have to pay. Currently many importers of Oregon grapes don’t pay the tax. O’Donoghue said Copper Cane has always paid the out-of-state tax.
Danowski said the bill has already changed four times since it was introduced.
