A California winery may lose its permit to do business in Oregon after state regulators determined the company repeatedly and intentionally violated labeling laws aimed at protecting Oregon's $5.6 billion wine industry.

Steve Marks, executive director of the Oregon Liquor Control Commission, issued a notice to revoke the certificate of approval for Copper Cane Wines & Provisions on Nov. 20, cutting off wine sales and distribution for the company in state.

California winery to change labels for Oregon brands

A California winery may lose its permit to do business in Oregon after state regulators determined the company repeatedly and intentionally violated labeling laws aimed at protecting Oregon's $5.6 billion wine industry.

Copper Cane, based in Rutherford, Calif. in the Napa Valley, is embroiled in a months-long dispute with Oregon winemakers over labels that improperly reference specific geographic wine regions, including the Willamette, Rogue and Umpqua valleys.

The controversy centers on two brands of Pinot noir and rosé wines — "Elouan" and "The Willametter Journal" — made by Copper Cane in California using grapes purchased from about 50 growers in Oregon, trucked in dry ice across state lines.

Labels for the brands use what Copper Cane officials described as "fanciful" language to describe their place of origin. For example, The Willametter Journal mentions "the Willamette region of Oregon's coastal range," while containers for Elouan also name the Willamette, Rogue and Umpqua valleys, which are federally designated American Viticultural Areas, or AVAs.

Federal label laws prohibit using an AVA name unless the wine is made in the same state, with at least 85 percent of grapes from that region. Oregon laws, adopted in 1977, are even stricter, requiring 95 percent of grapes from the AVA.

A group of Oregon winemakers and legislators asked both the OLCC and U.S. Alcohol and Tobacco Tax and Trade Bureau to investigate whether Copper Cane's labels violated rules by making false or misleading claims. Upon further review, Copper Cane voluntarily agreed to surrender nine labels to the TTB, though it was given permission by the agency to finish selling bottles already in the warehouse and on store shelves.

Now, the OLCC has come back with seven violations related to misleading labels and packaging for Elouan and The Willametter Journal. In his ruling, agency director Marks recommended pulling Copper Cane's certificate based on what he described as a "disregard for the law." The winery has until Dec. 20 to appeal.

Rep. David Gomberg, a Democrat representing the central Oregon coast, applauded the news in a press release. He said the breadth and scope of the OLCC findings should be alarming for Oregon wine drinkers and merchants.

"Copper Cane claims they were simply engaged in 'fanciful' marketing. But the State of Oregon has determined that they crossed the line from fanciful to fraudulent, and that they cannot sell low-priced California counterfeits here and masquerade them as quality Oregon wines," Gomberg said.

Jim Blumling, vice president of operations for Copper Cane, pushed back against allegations the winery knowingly did anything wrong. While they voluntarily agreed to change labels for Elouan and The Willametter Journal, avoiding  geographic references, Blumling said the old labels did receive prior TTB approval.

"From our perspective, we knowingly used federally approved (labels) that have now been deemed to be a problem that have been voluntarily surrendered," Blumling said. "It's a little hard to imagine that it becomes a violation when it was actually approved."

Copper Cane officials met Nov. 28 with Marks at the OLCC office in Portland. A spokesman for the agency said the meeting was scheduled prior to OLCC issuing citations. Neither he nor Blumling were able to comment on the discussions.

Gomberg said Copper Cane's labeling practices are an attempt to gain an unfair advantage and undercut Oregon winemakers in the marketplace. Jim Bernau, founder and CEO of Willamette Valley Vineyards south of Salem, Ore., said the concern is that Copper Cane has taken their high-profile AVA, known for producing exceptional Pinot noir, and put it on sale.

“If this kind of behavior is allowed to continue, we won’t have an Oregon wine industry," Bernau previously told the Capital Press.

Gomberg is an investor in Willamette Valley Vineyards. He said he plans to ask the federal government to stop sales of Elouan in all states nationwide.

Sales of Elouan are growing at a roughly 40-50 percent annual rate, Blumling said, and Oregon vineyards are expanding acreage in order to keep up with demand. He did not know immediately how much money the winery invests in Oregon, but said the figure is "significant."

The popularity of Elouan can be a good thing for the Oregon wine industry, Blumling said, exposing more consumers to Oregon wines.

"We're exposing more consumers to Oregon wine than any other vintner in the state," he said. "Elouan can be a gateway to consumers moving up the luxury scale and consuming more Oregon wine."

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