The "Golden Rule" applies in trade associations as well as everywhere else, so it's understandable, says Jason Haas of Tablas Creek Vineyard, that the Wine Institute opposes a piece of California legislation that would require any wine that "uses the appellation 'American' on its label and is produced, bottled, labeled, or sold in California be sourced 100% from grapes grown in the United States."

After all, big wineries provide much of Wine Institute's funding and support most of its programs.

Federal law currently allows up to 25% foreign grapes to be blended into wine carrying the "American" appellation. The U.S. is the only major wine-producing country that allows its national designation to include foreign wine, according to Stuart Spencer, executive director, Lodi Winegrape Commission.

Haas agrees that wines that use imported bulk wine should not be allowed to say they are "American" wine.

But, Spencer notes, Wine Institute argues that the current Federal rule provides "critical flexibility" to manage supply and stabilize costs.

The reality is, of course, that "thousands of winegrowers sell to a relatively small number of large buyers," and that imbalance has real consequences. When buyers shift toward imports, demand for California grapes falls, putting clear downward pressure on prices," Spencer says.

In 2025, while California winegrowers were ripping out about 10% of the state's vineyards and not harvesting another 10%, "bulk wine imports increased 19%, adding roughly 45 million gallons into the U.S. market. That surge of supply directly competes with California grapes and wine and delays the industry’s recovery," Spencer argues. Haas notes the the average price per ton paid on the open market dropped 8% last year.

Spencer also takes aim at the Federal duty drawback program, which he says "actively encourages imports." The duty drawback rule effectively allows imported bulk wine to enter the U.S. market virtually tax free, creating an incentive to choose imports over local farmers."

Hass says that because Wine Institute supports maintaining the duty drawback and opposes the no-foreign-wine rule for wine labeled American, Wine Institute "encourage(s) imports, weaken(s) demand for California grapes, and undermine(s) the growers, workers, and rural communities that depend on this industry.

The California bill would apply only in California. It seems perfectly logical to us. So why the opposition? Big Wine will say it complicates production and distribution, requiring them to make sure wine labeled "American" doesn't go to California. We suspect they fear it would spread; "Blue" states tend to do whatever California does.

As for whether requiring American wine to contain only American grapes would have any impact on consumers, Haas has his doubts. After all, Tropicana orange juice plainly states its blended from U.S. and foreign oranges, and consumers keep buying.

But, Haas says, just as requiring orange juice disclose whether it includes foreign oranges or not, requiring wine labeled as "America" would make "space for premium brands to differentiate themselves," just as it has for premium orange juice brands.