AB 1585: Wine labeling: “American” or “United States” appellation.

SECTION 1.

The Legislature finds and declares all of the following:

(a) According to a 2024 survey by PricewaterhouseCoopers, more than 80 percent of respondents expressed concern about climate change in their purchasing decisions and 44 percent said they would pay more to support the land and environment.

(b) A 2023 Packer Fresh Trends survey found that 62 percent of consumers said that they make a conscious effort to buy locally grown or regional produce.

(c) Consumers have come to expect American wines to be produced under some of the strongest labor and environmental laws in the world. This is because 81 percent of American wine is from California, approximately 65 percent of California winegrape acres are certified sustainable, and more than 90 percent of California’s wine production comes from sustainable certified wineries. This makes California a global leader in sustainable winegrowing practices.

(d) When surveyed by the Alliance for American Manufacturing, 77 percent of Americans said they prefer to buy goods made in the United States.

(e) Senate Bill 1004 (Holmdahl), Chapter 676 of the Statutes of 1961, codified California’s “Made in the U.S.A.” law, making it unlawful for any person, firm, corporation, or association to sell or offer for sale any merchandise that is labeled as being made or manufactured in the United States when any article, unit, or part of the merchandise has been entirely or substantially made, manufactured, or produced outside of the United States.

(f) In January 2011, the California Supreme Court described the importance of truthful and accurate claims of domestic origin, stating, “In particular, to some consumers, the ‘Made in U.S.A.’ label matters. A range of motivations may fuel this preference, from the desire to support domestic jobs, to beliefs about quality, to concerns about overseas environmental or labor conditions, to simple patriotism. The Legislature has recognized the materiality of this representation by specifically outlawing deceptive and fraudulent ‘Made in America’ representations. The object of Section 17533.7 ‘is to protect consumers from being misled when they purchase products in the belief that they are advancing the interests of the United States and its industries and workers.’ (Sen. Holmdahl, sponsor ... letter to Governor Brown, May 23, 1961) [‘There are many Americans who feel that American-made articles are of higher quality, and who rely on the “Made in U.S.A.” label’]. The Legislature evidently recognized some companies were using or might be tempted to use inaccurate ‘Made in America’ labeling, that some consumers might be deceived by and rely on it, and that consumers and competitors who honestly made their wares in the United States and marketed them as such were being or would be harmed.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 329. Internal citations omitted.)

(g) In a 2015 challenge to Section 17533.7 of the Business and Professions Code, the United States District Court held that the California labeling law did not violate the dormant commerce clause. (Clark v. Citizens of Humanity, LLC (2015) 97 F.Supp.3d 1199.) 1199).

(h) California produces an average of 81 percent of total United States wine production. This makes California the dominant force in the American wine industry, even though other states also produce and consume wine. In hearing a case challenging California’s wine labeling law, the California Supreme Court ruled, “... We conclude that the state’s interest in protecting California wine consumers from misleading brand names and preserving and maintaining the reputation and integrity of its wine industry as a result of the use of such brand names in out-of-state and foreign market outweighs the indirect and temporary effect of [Section 25241 of the Business and Professions Code] on out-of-state wine consumers. Accordingly, we hold that [Section] 25241 does not violate the commerce clause.” (Bronco Wine Co. v. Jolly (2005) 129 Cal.App.4th 988, 1028.) 1028).

(i) Under existing law, when a consumer purchases wine labeled as “American” or “U.S.A.,” 25 percent of the grapes used to make that wine could actually have been grown in South America, Europe, New Zealand, Australia, or elsewhere. Based on the label, those consumers may believe the wine is produced domestically, and most likely in California, but the bulk wine in that bottle could have actually been shipped thousands of miles miles, creating a significant carbon footprint in putting that wine on California shelves and could have been produced in a country that has lesser labor or environmental laws than in California.

(j) While federal labeling laws for an American Viticultural Area (AVA) allow for 25 percent of the wine to come from outside that AVA, state law for use of “California” or a subregion in California require requires that the 25 percent must still be from California. For several decades, state law has required that any wine labeled as “California” or labeled with any AVA or county in California is made from 100 percent fruit grown in California. However, the “American” wine label has no national, continental, or even hemispheric restrictions as to the origin of the 25 percent that is not from the United States.

(k) This measure is intended to provide truth in labeling for American wine so that consumers are aware of the origin of the wine and can make an informed choice when determining whether to purchase domestic or imported wine.

SEC. 4.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.