Under the terms of the Australia-European Community Agreement on Trade in Wine, on the first of this month, Australia became the latest in a long line of countries that prohibit outright the use of the name “Champagne” on the label of domestically-made sparkling wine. Champagne is a venerable protected appellation (or place) of origin in France which produces high quality sparkling wine based on unique location and winemaking techniques. In the European Community (“EC”) and in other countries which respect appellation of origin through trade agreements, only wines made from grapes grown in the region can be called Champagne.
The U.S. also signed a wine trade agreement with the EC in March 2006 banning the use of certain European wine names such as Champagne from American wine labels, requiring in its stead, “(U.S. appellation) sparkling wine.” However, a grandfathering clause allows labels in commercial use prior to March 2006 to be excluded from this requirement as long as they also include the actual appellation name, for example, California Champagne or New York State Champagne. As a result, approximately half of all sparkling wines sold in the U.S. are American-made wines with the Champagne name on the label, according to the Center for Wine Origins – a Champagne advocacy group – even though the grapes, winemaking techniques and growing conditions are often completely different from the place of origin. It’s a U.S. labeling convention that makes producers in classic European regions such as Champagne, Port and Sherry furious.
Efforts to protect the authenticity of reputable wines from imitation is nothing new, including here in California. California wines were already receiving recognition for excellence in the 1880’s in New York and Paris, leading to inferior out-of-state and foreign wines being mislabeled “California.” The adoption of the California “Pure Wine Act” in 1887 sought to ensure authenticity of origin by requiring bottleneck seals and labels be imprinted with the words “Pure California Wine.” And in the 21st century, the Napa Valley Vintners Association won a hard fought, five-year legal battle with Bronco Wine Co. to prevent it from using the brand names Napa Ridge and Napa Creek tolerated under federal grandfathering laws for wines made with non-Napa grapes. Defending place of origin on the wine label matters to us all.
The practice of naming California wines and grapes after traditional European wines began innocently enough in the 19th century by European immigrants who used familiar names to describe the wines they made. Even by the 1960’s, according to Hugh Davies, President and Winemaker of Schramsberg Vineyards in the Napa Valley, everyone called local sparkling wine Champagne. However, he said, “the U.S. market was much smaller then, even less for the premium segment. No one thought it was a big deal.”
But in the 1970’s, Napa Valley’s quality reputation began a renaissance. For the Schramsberg brand, recognition as a fine sparkling producer began with the first American Presidential trip to China in 1972, when the Schramsberg Blanc de Blancs was served in the Great Hall. It served as an impetus for French Champagne producers to establish wineries in the Napa Valley first with Moet & Chandon in 1973, Mumm in 1979 and Taittinger in 1987, all of whom would label their California wines “sparkling wine”, not Champagne.
Their practices raised Davies’ awareness that only wines from the Champagne region in France should be called Champagne, but it was purely for commercial reasons that Schramsberg would eventually transition away from using the term Champagne on their label in the mid-90’s.
Davies said that labeling their California wines Champagne vs. sparkling wine was becoming a concern from buyers as early as the mid-1980’s. And in the premium segment in which they played, the important buyers were the trade – the sommeliers and key decision-makers. He knew there was a real possibility of losing potential business due to the label despite the wine’s high quality and changed the label to protect the brand.
And what was the economic cost of abandoning the Champagne name? Davies emphatically said “None, zero downside. We didn’t lose customers but at the same time kept the gatekeepers happy.”
As far as Davies is concerned, there is no upside to labeling his Napa Valley wines Champagne because he feels that their Napa Valley wines are frankly better, naturally fruit-driven wines made without chaptalization. And from a marketing perspective, he believes their brand would actually suffer from being called California Champagne as the majority of wines using such term sell below $10 vs. the $30-35 average retail price of Schramsberg’s brands.
Australia also has its share of large producers of sparkling wine in all price ranges and relies on export markets like the U.S. and Asia. And yet, according to Mike Symons, winemaker at Stonier in Mornington Peninsula (part of the Lion Nathan group), most producers probably weren’t even aware of the September 1 date because most had already changed their labels after the 1994 trade agreement banning the use of Champagne first went into effect, even though at the time there was no strict deadline of compliance stipulated. Symons recalls, “there was not much fuss about it at all. The same with terms such as Chablis and Burgundy. I can’t remember any challenge. I don’t know of any labels that continued to use it.”
Part of the reason for the easy transition said Symons, is that they have their own descriptors in Australia. “Educated wine consumers and people involved in wine always use the term bubbly or sparkling (and sometimes “Fizz”), though some consumers still call it Champagne.”
A key early figure in today’s FDA, Dr. Harvey Wiley, in fact advised U.S. producers to use their own descriptors after the 1900 Paris Exposition wine competition when European judges nearly succeeded in eliminating U.S. wine entries “bearing a false indication of origin”: “Drop at once and forever the use of all names of foreign origin, and establish the merits of their brands on new and distinctly American names.”
Following that course is precisely what catapulted the U.S. wine industry into the global wine market beginning in the 1970’s. The global wine industry became modern in 1976 when Napa Valley wines Stags’ Leap Wine Cellars and Chateau Montelena triumphed at the Judgment of Paris blind tasting, giving U.S. vintners new-found confidence and inspiring legions of creative marketers, designers, architects and the media to do what Americans do best – reach out to the consumer. It created a marketing juggernaut that would lead to a multitude of successful brands, influential wine criticism and America’s current status as the world’s largest wine market – and arguably one of its finest producers.
American wine marketers succeeded by focusing on grape varietals and simple branding of family names, place names or fanciful names which sent a unique brand message to the consumer. At the same time, European producers lagged with U.S. consumers in part due to the convention of marketing their wines primarily by difficult-to-pronounce foreign appellation names, made more confusing by lack of varietal labeling. U.S. producers should continue to be marketing leaders, not imitators.
While producers have every right to continue to use so-called “semi-generic” terms like California Champagne under existing grandfathering laws, why do so? Do they not have confidence in their core brand name and do they really believe that they would lose business in the long-term by replacing the Champagne name with the more vivid term “sparkling wine”? I mean, really? By dropping the Champagne name from the label, they would be reinforcing all of our efforts to clearly communicate to the consumer place of origin on the wine label.
It’s not the 19th century, nor even the 20th century, when the reference to another, more distinguished European name may have facilitated the sale of wine to consumers who really didn’t know anything about wine. Today, in the 35th anniversary year of the Judgment of Paris, the imitation of traditional wine names like Champagne on U.S. wine labels is no longer necessary or desirable as it once may have been and, in fact, may prove to be limiting in our increasingly sophisticated global wine market.
 Mendelson, Richard “From Demon to Darling”. UC Berkeley Press, 2009
Article previously published on www.wine-muse.com September 29, 2011