Has the term ‘California Grand Cru’ Gone too Far?

Has the term ‘California Grand Cru’ Gone too Far? I belong to a professional sommeliers guild and I was intrigued by a conversation that stemmed from a ‘members only’ message board about the use of ‘Grand Cru’ on California labels. The discussion started when a certified sommelier questioned the validity of using ‘Grand Cru’ on a California producer label, Sea Smoke, which recently decided to use this classification on their “Ten” and “Southing” Pinot Noir labels.  Having just returned from the Champagne region, I jumped in with both feet (and in a bit of a rant) to defend geographical indicators and names, but the conversation quickly turned to whether or not California should adopt the French wine classification system, and if so, what would the model look like? Would we rank it based on vineyard (Burgundy), village (Champagne) or producer (Bordeaux)?

In hindsight, I was not concerned so much with the marketing aspect or the consideration of creating a California ranking system as much as I was to question the legal aspects of using a ‘Grand Cru’ designation on American wine labels today. Was there any wrongdoing by doing so? I set out to answer this question.

Starting with the obvious, who uses ‘Grand Cru’ on their wine labels anyway? Sea Smoke, of course. But are there others? I found a couple of American wineries who use the term as part of their winery name, such as Grand Cru Winery in Sonoma County and Grand Cru Estates in Oregon. I suspect there are more, but I am excluding the latter as they represent the producer’s name rather than a classification. What about vineyards? Saxum in Paso Robles has a vineyard named James Berry, and they claim it is “…one of the iconic grand cru sites of California”—but as far as I know, they do not use ‘Grand Cru’ on their labels. I could not confirm this as my queries were left unanswered. There are probably other producers that use the term—if they exist, I could not find them.

I suspect Sea Smoke is the first U.S. producer to boldly use ‘Grand Cru’ on their label. Queried to find the answer, Vice President, General Manager, and Director of Winemaking Victor Gallegos validated my assumption by stating, I suspect we are the first American producer, but there might be a winery out there that has used the term and we are simply not aware of it.Gallegos confirmed they started using this term with their most recent 2009 release. Why did you decide to use this term—was it a marketing decision, or something else?  “Sea Smoke, as a brand and as a company, is all about one special piece of dirt…..the Sea Smoke estate vineyard.  The California Grand Cru designation simply reinforces that message to our customers.   It would have been unseemly for us to have unilaterally declared ourselves a Grand Cru vineyard…but we thought it reasonable to repeat the words of a noted California wine authority”, stated Gallegos. Victor’s comment is referring to a Wine Spectator article in which James Laube called Sea Smoke “an important part of Santa Barbara’s wine scene and one of its ‘grand cru’ properties.”

One thing for sure is that Sea Smoke is not using this term loosely. They have a defined definition, which should be noted. In France, the French Appellation d’Origine Contrôlée (AOC) controls the ‘Grand Cru’ definition but it is a bit confusing since its meaning changes based on region. At a high level, Grand Cru is a regional wine classification that designates a vineyard known for its favorable reputation in producing wine. Technically, it is not a classification of wine quality, but rather an indication of vineyard or terroir potential.  It is the highest level of classification of AOC wines from Burgundy or Alsace. The same term applies to Saint-Émilion Châteaux, although it does not represent the top tier classification. In Burgundy, premier cru is immediately below grand cru, and is also known as 1er cru. This can get extremely confusing even for wine aficionados with advanced knowledge.

In California, Sea Smoke has its own definition, but Gallegos suspects the opinion in the wine industry will differ widely as it relates to the definition of a Grand Cru vineyard….Sea Smoke’s definition includes three components:

  1. A vineyard which produces wines of world-class quality
  2. A vineyard with distinctive and recognizable terroir
  3. A vineyard, which has shown consistency, across vintages and across producers

But getting down to the hard facts, who decides classification in California anyway? No one—that’s the point. Wines from outside of the traditional wine growing regions of Europe tend to classify by grape rather than by terroir or quality, although I am aware of Australia’s attempt at a quality classification, not to be confused with the American Viticultural Area (AVA), which does not limit the type of grapes grown, the method of vinification, or the crop yield. Their mission is to define a geographical location.

Moving on to a more obvious question, do American producers have a right to use ‘Grand Cru’ on their label? Meaning, are there any laws that prohibit the use of such a term in the U.S.? On one hand, there are a number of agreements signed to protect geographic indications on an international level. The International Agreement of Trade-Related Aspects of Intellectual Property Rights (a.k.a. TRIPS) administered by the World Trade Organization (WTO) is one of those agreements. Many signatory countries (including the U.S.) have agreed to protect Geographical Indications (GIs) such as Port, Champagne, Napa, etc., and the Center for Wine Origins has been hard at work to protect the GIs.  For example, under current law, new producers cannot use the term ‘Champagne’. However, the grandfather exception clause allows continued use of geographic indications that were in trademarks in actual use before TRIPS became effective—which is why you still see Korbel’s “California Champagne” on American wine shelves.  Are Champagne producers and growers happy with this? Absolutely not. This was evident as I sat down to dinner with Champagne producer Bruno Paillard, a story I will cover later.

Digging deep into the Intellectual Property Protection and Enforcement Geographical Indications agreement, I find several references that highlight indications of quality and reputation, as well as positions that speak for misleading the public. Here are the excerpts:

 “Geographical indications are defined, for the purposes of the Agreement, as indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin (Article 22.1). Thus, this definition specifies that the quality, reputation or other characteristics of a good can each be a sufficient basis for eligibility as a geographical indication, where they are essentially attributable to the geographical origin of the good.”

“The registration of a trademark which uses a geographical indication in a way that misleads the public as to the true place of origin must be refused or invalidated ex officio if the legislation so permits or at the request of an interested party”

“This applies even where the public is not being misled, there is no unfair competition and the true origin of the good is indicated or the geographical indication is accompanied be expressions such as “kind”, “type”, “style”, “imitation” or the like.”

On a follow-up conversation with a WTC official, I asked if the aforementioned excerpts broke any international laws by using the term ‘California Grand Cru’, and whether or not the term misleads the public as to the true place of origin. The official told Enobytes.com,

“Although the TRIPS Agreement states that geographical indications are related to both the origin and the quality or characteristics of a product, it does not specify how the quality is defined or identified. Nor does it refer to any terms or names that might be used to describe the quality, and what constitutes misuse. That is left up to each country’s domestic law to determine. So whether a term is a misuse or misleading in the US would depend on US law. No other country has challenged US law on this point under the WTO dispute settlement system, which is the ultimate arbiter on legal interpretations of WTO Agreements.

Paragraph 1 of Article 1 on “Nature and Scope of Obligations” of the TRIPS Agreement says: “Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.”

When querying many organizations on this topic, I received a response from Thibaut Le Mailloux, Director of Communications at the Le Comité Interprofessionnel du vin de Champagne (CIVC) which responded, “…we should focus on Grand Cru once wine GI names are protected in the U.S.” This is not to say the CIVC would have direct involvement in this debate. Yet, they are a governing body that supports the Center for Wine Origin’s mission to protect Geographical Indications.

What about the AOC? They must care about expressions such as ‘California Grand Cru’, right? Nope. They only care about governing French regulations, and believe me, they will go after producers who break the rules. You may have heard of a recent story where a Loire producer faced jail time for labeling his wine inappropriately as ‘AOC’, as pun on the initials ‘Anjou Olivier Cousin’, an offense that carries a €37,500 fine or up to two years in prison. But since the AOC only governs French regulations, the Americans have nothing to worry about. However, I still agonize over regional branding as they serve as source-identifiers for consumers. For example, the French use the term ‘Grand Cru’ to represent quality, in a sense. Will using this term in other parts of the world deflate the reputation as an indication for vineyard or terroir potential, which ultimately defines unique quality? I believe the verdict is out on this one, but this seems like an appropriate lead to introduce the specifics of the U.S. /EC Wine Agreement with the Internal Revenue Code of 1986 (IRC), which defines semi-generic names as a name of geographic significance as well as designations for wine ‘class’ and ‘type’. This law specifically dovetails into the TRIPS agreement to state that preexisting uses of semi-generic names on non-European wine are acceptable under the grandfather law, but prohibits new brands from using the names on non-EC wine. An example of a semi-generic name would be something like Burgundy (France), Port (Portugal), Chianti (Italy), Sherry (Spain) and such.

Producer XYZ may continue to use the semi-generic name “Sherry” or “Burgundy” on a label, provided they do not change the brand name or fanciful name as they appear on a Certification/Exemption of Label/Bottle Approval (COLA) issued prior to March 10, 2006 from the Alcohol and Tobacco Tax and Trade Bureau (TTB).

So for example, Producer XYZ produces “Smith Elegance California Cream Sherry.”  On the label and corresponding COLA, the brand name is “Smith,” the fanciful name is “Elegance,” “Sherry” is the class and type designation, “Cream” is considered an  expression, and “California” is the labeled appellation of origin. Sherry that is not from Spain must be labeled with an appellation of origin.

If you read that last paragraph carefully, you will see how the COLA treats the term ‘Grand Cru’ in its label approval process—it defines it not as a means to qualify classification or quality but rather as an optional fanciful name.

The EU and US agreement also covers expressions. For example, “The US is allowed to use under certain conditions and for a limited period of time, 14 EU traditional expressions: Château, classic, clos, cream, crusted,/crusting, fine, late bottled vintage, noble, ruby, superior, sur lie, tawny, vintage and vintage character”, but nowhere in the agreement does the term ‘Grand Cru’ come up.

So what is the conclusion?  With no back yard or international governing body, Sea Smoke has every right to do whatever they want with the ‘Grand Cru’ term, and my assumption is that many American producers will follow in their footsteps.

My only concern is that without defining an agreeable classification for California, we will see things like ‘California Grand Cru White Zinfandel’ on the shelves and I doubt anyone wants to see the market saturated with this sort of nonsense. At least Sea Smoke has done their due diligence to define what they mean by ‘Grand Cru’ and they make a quality product to back up their claims. But is this enough?

It will be interesting to see where this topic takes us in the coming months and years…