Wine wars: Oregon and Napa Valley clash over labeling, state and federal regulators investigating

Rows of grapes growing at Willamette Valley Vineyards in Turner on Tuesday. The vineyard is part of a fight against what it perceives as misappropriation of the region’s pinot noir by a Napa Valley winery. (Troy Brynelson/Salem Reporter)

TURNER — Jim Bernau bought a rolling hillside of blackberry vines and scotch broom in Turner in 1981, intending to grow pinot noir. At the time, Oregon wineries “were just trying to survive,” he said.

Today, Oregon’s wines are coveted across the country. In 2017, Oregon wineries had sales of $550 million, according to the University of Oregon’s Institute for Policy Research and Engagement.

Bernau’s thorny hillside became Willamette Valley Vineyards, logging $21.4 million in revenues in 2017, about half stemming from pinot noir, according to public filings.

Bernau, 65, has long felt the reputations of his vineyard and of the region’s pinot noirs are entwined. That reputation took years to build, he said, but it could take five minutes to destroy.

“What Copper Cane is to us are those five minutes,” he said.

That is the name of the Oregon wine industry’s latest nemesis. Copper Cane Wine & Provisions hails from the Napa Valley and is run by 36-year-old Joe Wagner, who three years ago, famously sold a separate wine company he developed for $315 million.

For now, the dispute is rooted in labels on Copper Cane’s brands: The Willametter and Elouan. Both brands feature the same rustic, pre-industrial design as many other wines, but they feature references to the Willamette, Rogue and Umpqua valleys.

The Oregon industry is on alert, saying the Copper Cane is hijacking Oregon’s carefully cultivated — and legally protected — winemaking regions.

They also question whether Copper Cane’s wines were made to Oregon standards. The winegrowers have pressed state and federal regulators to investigate.

“I think there’s a huge statewide interest in making sure this is pursued,” said Steve Marks, executive director of the Oregon Liquor Control Commission. “It will be pursued one way or the other. It’s just what avenues, what sort of timing takes place.”

Copper Cane, headquartered in Rutherford, Calif., denies the claims.

“Know that we take this very seriously and have followed all (federal) rules and regulations and have done nothing to warrant this type of press,” Jim Blumling, vice president of operations, said in an email. He added the company has been working with state and federal regulators.

Blair Jacobson of Willamette Valley Vineyards works a forklift to move wine barrels at the sprawling facility in Turner. The vineyard is preparing to start its harvest season. (Troy Brynelson/Salem Reporter)

The Willametter’s label reads “Sourced from: Territory of Oregon.”

Another section reads, “This Pinot Noir was cultivated and crafted to honor the unique area from where it was grown. The Willamette region of Oregon’s coastal range is a place credited over decades for its vibrant and fresh style. The vintage of 2017 showcases the gift of Mother Nature in all her glory.”

Wine cases for the Elouan brand include “Umpqua Valley” and “Rogue Valley” descriptions.

Blumling doesn’t dispute the marketing, saying those are the places where the grapes were grown and from where they were bought.

“We believe the place is probably more important than the winemaker,” he said.

Oregon wineries, however, are more concerned with what wine drinkers believe.

In the wine industry, labels like “Willamette Valley” can be more than descriptions. Because wine flavor is influenced by everything from soil to altitude to humidity, winegrowers often work together what are called American viticultural areas. The aim is to help winemakers protect a region’s specific attributes of wine, as well as inform consumers.

When Copper Cane names those valleys, Oregon winegrowers say the winery misleads customers and could damage their hard-won reputations if consumers don’t like what they drink.

The defensive posture is commonly seen in places like Champagne, France, that lay claim to a unique kind of sparkling wine, said Tom Danowski, chief executive officer of the Oregon Winegrowers Association, which represents more than 700 wineries and 1,000 vineyards in the state.

“There’s a set of really elaborate global standards that protect things like Parmesan Cheese or Feta Cheese or Champagne or Tequila,” he said. “Those are products or categories that are attached to specific geographies around the world and when you screw around with them, people get very protective.”

Jim Bernau seated at his office at Willamette Valley Vineyards. Bernau, 65, bought the land in 1981 to grow pinot noir. (Troy Brynelson/Salem Reporter)

American viticultural areas are approved and regulated by the federal government’s Alcohol and Tobacco Tax and Trade Bureau — also known as the TTB.

In a phone interview with Salem Reporter, Copper Cane’s vice president said its labels comply with federal rules.

To sell wine from another region, winemakers receive certification approved by the federal trade bureau. Copper Cane’s certification, also known as an appellation, was granted in February, according to the federal bureau’s database. It states its wines are from Oregon.

Blumling said the company buys grapes from more than 50 farmers in the Willamette, Umpqua and Rogue valleys, then trucks them for processing into wine. But the appellation only claims to be from Oregon.

“We say Oregon,” he said. “All currently produced Copper Cane wines from Oregon bear the Oregon state appellation.”

Oregon winegrowers and state regulators worry whether the labels are only the first sign of compliance problems.

The OLCC wrote in a letter in August and another more recently that it worries Copper Cane doesn’t use a high enough percentage of Oregon grapes to say the wines are sourced there. Federal regulations mandate a wine promoted as being from a specific region must be made 85 percent with grapes from that region. To sell in Oregon, the OLCC requires 90 percent.

“I am concerned that these wines were not fully finished in Oregon,” Steve Marks wrote to Copper Cane in August.

The OLCC has asked Copper Cane to produce records of production, shipping and bottle for The Willametter and Elouan brands. The agency also wrote to federal regulators earlier this year asking for an investigation.

“The OLCC requests the TTB Trade Investigations Division, including the Market Compliance Office, initiate a compliance audit of Copper Cane wines, specifically the Elouan and Willametter brands,” the letter said.

The federal bureau declined to comment.

Marks said the commission does have the power to stop wine sales it finds violates Oregon regulations. Action against Copper Cane, he said, rests on whether federal regulators find the California winery at fault.

“This is speculative until we determine if it meets content standards,” Marks said. But he added he would be “unequivocal” in defending Oregon’s wines.

“We are going to exert the maximum amount of our authority to bring them in compliance” with state regulations, he said.

Marks added that if an investigation finds wrongdoing, the state’s wineries could sue an offender for civil damages. Danowski, however, said Oregon’s industry is nowhere near that point.

Blumling said the company is cooperating with investigators.

“What that outcome proves to be is uncertain,” he said.

Have a tip? Reporter Troy Brynelson can be reached at 541-357-6190, [email protected] or @TroyWB.

Elliot O’Dell of Willamette Valley Vineyards sprays down the wine press after a load of grapes Tuesday afternoon. The vineyard, based in Turner, made more than 150,000 cases of wine in 2017. (Troy Brynelson/Salem Reporter)