Conjunctive Labeling: Fair or Foul?

11 May

The Sonoma County Vintners plan to follow in the footsteps of the Napa Valley and require any wine produced in a Sonoma County American Viticultural Area (“AVA”) to have the words “Sonoma County” placed underneath the AVA designation on all wine labels.  All nine of the major wine and grape trade associations are now behind the proposed legislation, called the “Sonoma County Conjunctive Labeling Initiative”.

The proposed benefits of conjunctive labeling would be to promote the Sonoma County brand and give the individual AVA’s of Sonoma County enhanced name recognition.  The vintners believe this would increase awareness of Sonoma wines and help grow the wine industry of Sonoma.  On behalf of Sonoma County, WineOpinions, a market research firm, examined the law’s potential effects.  They concluded that consumers recognize a wine as having higher quality when the Sonoma name is attached.

While sentiment about the proposal is generally favorable, many still question the initiative, particularly the fairness of forcing wineries to market their wines in a particular way for the greater good of the Sonoma County brand.  Currently, any wine from a Sonoma County AVA may place the phrase “Sonoma County” on their bottle if they choose to.  This law would force those who chose not to place the designation on their wine to now do so, and if they fail to, be subject to criminal prosecution.

While the law may benefit a small Sonoma winery or lesser known AVA by creating a common thread with more known names like Russian River Valley, would it have any benefit to the more recognized wine or AVA?  There is probably a reason some wineries from Sonoma County have chosen not to place the phrase “Sonoma County” on their labels.  Some wineries may believe their name is of higher regard by itself and differentiated from Sonoma County.  Others may believe that being forced to do this would clutter their logo, or may simply not wish to pay the increased costs of changing their labeling practices.  Also, some may not wish to sound redundant on their label by having to place “Sonoma County” under an AVA such as “Sonoma Coast”.  It is arguable that these wineries should have the right to make those business decisions that they believe is critical to their success.  Many wineries pride themselves in their uniqueness, and may not wish to be related to wineries which may be of lesser quality or reputation in their minds.

The crux of the argument is that of free trade, and the right to market or advertise a product in a particular way is usually included in that bundle of sticks.  The proposed restriction would limit free trade for the good of the Sonoma name.  A winery that believes excluding the Sonoma County designation on their bottle would have to give up this perceived market advantage for the sake of enhancing the Sonoma County brand.  Other than the reputation and price of a wine, the wine’s label itself is the strongest marketing tool in attracting consumers.  While the Sonoma Vintner’s research showed that the Sonoma tag would increase marketing potential, should wineries have to rely on outside and potentially biased research in their own marketing research and decisions?

Further, approval of the law is placed in the hands of the State legislature, where not only elected officials from Sonoma, but officials from throughout California, will be the ultimate decision makers on the future of Sonoma labeling practices.  Legislators from other districts do not necessarily have the best interest of Sonoma in mind, which needs to be thought about before this proposal is sent to Sacramento.

On the other hand, a similar law passed for Napa Valley in the late 1980’s, turning Napa wineries into a collective force on the industry.  Napa has flourished since, becoming the preeminent wine appellation in all of the States.  Sonoma could have a similarly successful result, and it seems all their major wine associations believe that.

An insightful way to evaluate the initiative may be to hypothesize how conjunctive labeling would effect a less preeminent wine community.  For example, while San Diego has a strong wine culture with many high-quality wines, the name San Diego itself does not hold as strong a weight in the wine community as say Napa Valley, that would deem it beneficial to all wineries in any San Diego AVA to be forced to designate so on the label.  By requiring this designation, the overall reputation of San Diego wines may increase over time, but well known and successful wineries currently not using the designation may not be helped out by it, and could be hindered.  In Napa, the strength of the name was already strong, and the law allowed the region and its wineries to reach new heights.  Sonoma probably falls somewhere in between Napa and San Diego in this regard, and thus on the fringe of whether the law would end up being fair balanced against free trade arguments.

Both sides of the debate have valid points, and if passed, the Sonoma law could be the ultimate litmus test on the effectiveness of conjunctive labeling laws.

Image credit to Matt Banks / FreeDigitalPhotos.net

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