By George Plaven • Capital Press (Salem)

SALEM —

It was during a sales trip to China in 2017 that Ken Wright knew Willamette Valley wine had arrived on the world stage.

“Not only did they know of the Willamette Valley, they knew how to say it correctly and they associated it immediately with pinot noir,” said Wright, founder of Ken Wright Cellars in Carlton. “Honestly, I was surprised.”

With increasing global recognition, Wright and fellow Oregon winemakers spent the next two years debating how to protect and burnish their brand. The result was a series of bills introduced in the 2019 Legislature that called for raising the state’s wine standards and enforcement.

But those measures did not sit well with everyone. A coalition representing 65% of all wine grapes grown in Oregon opposed the bills, arguing they divided the industry and created barriers to markets.

While a few of the bills passed, the coalition was successful in stalling others.

The Oregon Liquor Control Commission is now hearing from producers in major wine grape growing regions across the state. Settling differences may take some time, though industry officials are confident they will find a solution going forward.

“Demand for Oregon wine is unprecedented,” said Tom Danowski, CEO of the Oregon Winegrowers Association. “There’s always a little bit of tension prompted by growth.”

Today, Oregon has 769 wineries and 1,114 vineyards.

The industry generated $5.6 billion in statewide economic impact in 2017, an increase of 67% over the last three years.

Yet Danowski said Oregon still represents just 1% of all U.S. wine made annually. That means there is still tremendous market potential, along with new challenges.

Over two-thirds of Oregon’s vineyard acres are in the Willamette Valley, one of the premier pinot noir-producing areas in the world. Wright said valley winemakers must defend their unique qualities against deception by outside winemakers.

Oregon already has some of the highest wine production standards of anywhere in the country.

Under federal law, to label a wine as a single variety — say, pinot noir or Chardonnay — it must be made from at least 75% grapes of that variety. In 1977, Oregon adopted even stricter rules, requiring 100% content. Seven varieties were exempted from the higher standard.

Thirty years later, in 2007, the Oregon rule was amended to 90% and increased the number of exempted varieties to 18.

Willamette Valley winemakers proposed two bills that would have gradually raised both standards to 100%. The rules would have applied specifically to the Willamette Valley.

Jim Bernau, founder and CEO of Willamette Valley Vineyards in Turner, said the goal is to protect the integrity of Willamette Valley wine.

According to Nielsen cash register data collected over a 52-week period ending on June 30, 2018, pinot noir labeled “Willamette Valley” sold for $10.42 more, on average than that labeled “Oregon. That added value could be lost if brand integrity is not protected, Bernau said.

The primary opposition to one of the bills — Senate Bill 111, which died in committee — came from an informal industry coalition, formed by Rob Wallace of Del Rio Vineyards in the Rogue Valley, which argued the bills created confusion and uncertainty.

The bill would have increased maximum penalties for violating labeling standards from $5,000 to $25,000.

Wallace first heard about SB 111 from a customer in California, where he sells about 250 gallons of bulk wine a year. If passed, the customer told Wallace she could not longer buy his product. The rules were just too nebulous, and the penalties too severe.

The coalition said the bill would have made it harder for Oregon producers to sell their grapes.

Scott Steingraber, president of the Southern Oregon Winery Association, said the Rogue and Umpqua valleys have warmer climates to grow darker, more full-bodied fruit. More than half the region’s acreage is currently in pinot noir, which can be sold to Willamette Valley wineries for blending.

But Steingraber said the 100% exclusivity standards would have made Southern Oregon grapes less valuable.

Chad Day, owner and manager of RoxyAnn Winery in nearby Medford, said limiting sales outside the region would be “very detrimental” to Southern Oregon growers.

“Rules written for one region don’t necessarily apply to the other,” Day said. “That just needs to be considered when we write these (bills).”

Wallace, who continues to organize the industry coalition, said there has been a lot of strife this spring but they remain committed to uniting Oregon winemakers.

“This is a big deal. It affects a lot of people,” Wallace said. “We need to take a minute, take a breath, and do what we can to have a reasonable conversation.”

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