Three Napa vintners suspended by ABC
10-day discipline hits producers who lacked license to pour
By JACK HEEGER
Register Staff Writer
Three Napa Valley vintners cited by the California Department of Alcoholic Beverage Control for illegally pouring wine at a consumer event have had their licenses suspended for 10 days.
The three — Eagle Eye Wine, Elkhorn Peak Cellars and StoneFly Vineyard — were tagged in May at a fundraiser in Tiburon. They were charged with violating terms of their licenses. They appealed the citation and pleaded their case before an administrative law judge in Napa in September.
The case raises interesting questions for the many vintners in California that do not operate their own wineries.
The three vintners in the case all have their wines made at custom crush facilities and hold what are called Type 17 (wholesaler) and Type 20 (retailer via the Internet and direct sale to consumers) licenses. Those licenses do not allow them to pour at consumer events.
A Type 02 license, which is held by vintners with physical winemaking facilities, does allow consumer pouring.
In a letter sent to each of the three, the ABC said five days of the suspension are stayed, provided that no violations or disciplinary actions occur within the next year. The suspensions are to take effect Jan 18, 2007.
In making his ruling, administrative law judge Robert Coffman acknowledged that the trio received no remuneration for their participation at the Tiburon event and that the motive for participating was to “gain public awareness of its wines and to donate to a civic organization.”
He further said in his order that the three were unaware that participation in the event was a violation of ABC regulations. He also wrote, “The Department (ABC) has not always been diligent in enforcing the laws governing wine tastings, primarily because of staffing limitations and the lack of complaints about such events.”
Nonetheless, the judge ruled that their participation violated two sections of the Business and Professions Code and constituted cause for discipline under two sections of the state constitution.
None of the principals at the three wineries was surprised at the decision.
Ken Nerlove of Elkhorn Peak Cellars said when they decided to appeal the citations, “We hoped to get the penalty reduced, and we hoped to get this out in front (of the public), and we accomplished those.”
Bill Wolf of Eagle Eye Wine referred to the portion of Coffman’s decision that read, “Some licensees came to believe that the statutes dealing with wine tastings by non-profit organizations … authorized donations of wine to such organizations, and that conducting a wine tasting is a form of ‘donating.’”
Although Wolf acknowledged that Eagle Eye broke the law and expected an adverse decision, he said, “I felt that the ABC should have given us a smack on the hand and told us not to do it again. And then they should have sent a letter to everyone else (who hold the licenses under question) and warn them of the law.”
“They (ABC) have to do it and I respect that,” said Claudia Sansone of StoneFly Vineyard, referring to the suspension. “I’ll just use that time to be a little more domesticated,” she said with a laugh.
When they were originally cited, the charges included illegally donating wine as well as pouring. In October the ABC re-interpreted the law and said that holders of any type of license were allowed to contribute wine to charitable organizations, but emphasized that the change did not affect pouring at consumer events.
The ABC originally had recommended a 15-day suspension or a fine, the size of which is determined by a formula involving last year’s gross revenues.
“I had no intention of paying the fine,” Sansone said. Instead she joined with Wolf and Nerlove in appealing the citations.
For Nerlove, it would have meant a fine of about $7,000. Wolf said he had not calculated the fine but would accept the suspension.
Another Napa Valley vintner, Tom Bardessono of Bardessono Vineyards, also was cited at the Tiburon event, but opted to accept the 15-day suspension.
More than a dozen vintners contacted by the Register acknowledged that they had no knowledge of the restrictions on the Type 17 and Type 20 licenses and had never heard of any enforcement of those restrictions. But an ABC official said that about 50 cases had arisen during the past year and that enforcement had been stepped up in recent months.
Wolf said he had been told by an ABC representative that the citations were triggered by complaints from some large wineries in Sonoma County holding type 02 licenses.
“My production won’t be a threat to a big winery,” said Nerlove, who produces only 1,500 cases yearly. “Their (large wineries’) ad budgets are bigger than our gross revenue.”
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