Is this the end of For Sale in Texas Only?

For sale in Texas onlyA proposed change to federal wine label laws could mean the end for wine that says For Sale in Texas Only – a term that implies that a wine is local when it might be made with grapes from anywhere in the world.

The Treasury department’s tax and trade bureau announced this week that it wants to revise the regulations that allow a wine to carry For Sale in Only designation. In Texas, we call it FSTO – which stands for For Sale in Texas Only – but you’ll see FSO labels in every state: For Sale in Colorado Only, For Sale in Pennsylvania Only, and so forth.

Under the new rules, wines labeled FSO won’t be allowed to list the vintage or the grape it is made with, like cabernet sauvignon or chardonnay. Currently, FSO wines can list both and look local in almost every respect, save that they don’t have a state name or other appellation on the front label. The only clue that they aren’t local is a line in small type on the back label that says FSO, and that only wine writers, wine geeks, and winemakers understand.

FSO is sometimes used to circumvent appellation laws when the wine isn’t made with enough local fruit for it to have a state name. This is unfortunately common in regional wine, and has been an especial problem in Texas for the past decade or so, as the number of wineries has almost doubled and grape acreage hasn’t kept up.

That’s because appellation laws require that 75 percent of the grapes used to make the wine must come from that state for it to labeled Texas (or whatever). If a wine is made with less than 75 percent local grapes, it must use the word American on the front label, something producers don’t like to do because it’s obvious that the wine isn’t local. And what’s the point of local wine that isn’t local?

Hence the FSO label.

It’s important to note that FSO isn’t illegal and that many producers use it legitimately. The problem comes when it’s used to disguise non-local wine as local. That, apparently, was the impetus for the rules change – a Georgia winery selling an FSO wine made with Napa Valley grapes in North Carolina, and which caught the attention of a key Napa trade group and the Napa Valley’s U.S. congressman.

In fact, a spokeswoman for U.S. House Rep. Mike Thompson (D-Calif)., who chairs the Congressional wine caucus, emailed me to say that FSO in the Georgia case was “a TTB labeling loophole” and “works against strict and rigorous labeling rules to ensure that consumers know exactly what they are purchasing.”

The actual rules proposal is almost indecipherable unless you practice liquor law. My thanks to Austin attorney Kimberly Frost, who did her usual brilliant job in explaining it to me. The new rules will limit FSO wines to terms like red wine or white wine on the front label, in the hope that producers will use the more accurate American appellation so they can list the grapes and the vintage..

One irony to all this? The new FSO rules may give regional producers incentive to buy California bulk wine and put their label on it. That means  we could see more California wine sold by wineries in the other 47 — Texas-bottled Russian River pinot noir, anyone? That’s because the revisions will allow producers to use grape names and vintage on California bulk wine, which they couldn’t do if they bought California grapes or grape juice and combined them with local grapes to make FSO wine.

The tax and trade bureau is taking comments until Aug. 22, but there’s no time frame on when the rules will take effect. My guess, given how slowly the agency works, is that we won’t see anything until the middle of next year, and it could be even later than that.

 

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4 thoughts on “Is this the end of For Sale in Texas Only?

  • By Kyle Schlachter - Reply

    This will only really affect FSiO wines that use the out of state appellation. CA producers don’t care that TX wineries are using bulk fruit with identifying its origin. The impetus for this was Napa not liking non-CA producers putting Napa Valley on the label.

    • By Wine Curmudgeon - Reply

      I don’t disagree with you, Kyle.. but we can hope. In Texas, it’s not about California producers, but Texas wineries that want to make lots of wine with grapes we don’t have here.

      And the more I talk to people, I do think this rule will have the unintended consequence of Texas wineries selling California wine, made in California but bottled here.

  • By John Crockett - Reply

    What about people who enjoy drinking wine made in Texas from grapes grown in Texas? That was the good thing about the FSTO clause. Until the deregulation (hmmmmm….a dirty word to some Texans but a welcomed standard-setter by others of us) of FSTO, a winery could put the word “Texas” on the front label only if at least 75% of the juice was from Texas-grown grapes. Now all that will be obscured. Some wineries (e.g., Duchman, Haak, Becker, etc.) clearly indicate on the label the source of the grapes used in the vintage. I am in favor of any regulation that requires clear labeling of where the grapes were grown as well as where the wine was made.

    • By Wine Curmudgeon - Reply

      Thanks for the comment. My point here, all things being equal, is that wine made in Texas should use Texas grapes. Some producers don’t want to do that, and so their product should be labeled as such in a way that everyone understands.

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