EFFECTIVE JANUARY 1, 2024, CA WINERIES AND DISTILLERIES WILL HAVE REPORTING AND PAYMENT OBLIGATIONS TO CALRECYCLE UNDER THE BOTTLE BILL

With the passage of  Senate Bill No. 1013, beginning on January 1, 2024, wine and spirits will be included in California’s state container deposit system established by the California Beverage Container Recycling and Litter Reduction Act (known as the “Bottle Bill”).  As such, wineries and distilleries will now be required to comply with the Bottle Bill’s CA Redemption Value (CRV) payment and reporting obligations beginning January 1, 2024, and CRV labeling requirements for all wine and spirits sold after July 1, 2025.  Beer and certain other non-alcoholic beverages were already previously covered by the Bottle Bill.

Importantly, because all wines and spirits sold in California after July 1, 2025 must be labeled with some type of approved CRV statement, producers should start including this information on their bottles and/or labels as soon as possible for all products to be offered for sale on or after January 1, 2025.

Below we have included a brief summary of the rules applicable to wines and spirits under Bottle Bill, the new registration and payment obligations, and labeling changes required to comply with the new laws. 

TYPES OF BEVERAGES:

The Bottle Bill applies to beer, malt beverages, wine, spirits, wine and spirit coolers (regardless of ABV), and certain other non-alcoholic beverages intended for sale in California. Section 14504 and 14560.

CA REDEMPTION VALUES (CRV): Section 14560

  1. For bottles smaller than 750 mL (less than 24 fluid ounces), the CRV is 5 cents/bottle.
  2. For bottles 750 mL or larger (24 fluid ounces or more), the CRV is 10 cents/bottle.
  3. For boxes, bladders, pouches, or similar containers (regardless of size), the CRV is 25 cents/container.

REGISTRATION & PAYMENT OBLIGATIONS BEGINNING JANUARY 1, 2024:

  1. All wineries and distilleries should register with CalRecycle as soon as possible to prepare for payment and reporting requirements beginning 1/1/2024 (information regarding registration can be found here).
  • All producers and importers of wine and distilled spirits should register as a Beverage Manufacturer. Brand owners that contract with producers for the manufacture of wine or distilled spirits are not considered Beverage Manufacturers.
  • Any wineries and distilleries that sell wine or spirits in California Direct to Consumer or Direct to a Retailer (for wine) should also register as a Distributor.

2. Report and pay the applicable CRV to CalReycle.

  • The winery or distillery may pass on this cost to consumers (as the consumers can return the bottles to a recycling center for the redemption). Section 14560
  • The processing fee is variable depending on container material (size does not matter) and changes each calendar year, but is currently 0.452 cents/glass bottle.  The Wine Institute has noted that the hope is for the processing fee to be reduced to zero.

3. Report and pay the applicable Processing Fee.

  • The processing fee is paid on all containers a winery or distillery sells, whether to wholesalers, retailers, or consumers.  Section 14575(g)
  • The processing fee is variable, but is currently 0.426 cents/glass bottle or for new containers, 0.574 cents/container.  The Wine Institute has noted that the hope is for the processing fee to be reduced to zero.

LABELING OBLIGATIONS FOR ALL WINES AND SPIRITS SOLD AFTER JULY 1, 2025:

  1. All wines and distilled spirits sold in California after July 1, 2025, must be labeled with: “CA Redemption Value,” “California Redemption Value,” “CA Cash Refund,” “California Cash Refund,” or “CA CRV”.
  2. The CRV statement must be clearly, prominently, and indelibly marked and can be added on the actual label or by sticker (not on aluminum cans), stamp, embossment, or other similar method. Labeling size and location requirements are set forth below: CCR 2200(b).
  • For glass and plastic, the CRV statement must be on the container body label or secondary label with:
    • a text height of 3/16”, or
    • a minimum text height of 1/8” and in a contrasting color to the background and nearby text.
  • For aluminum, the CRV statement must be on the top lid:
    • for tops greater than 2 inches in diameter, the CRV statement must be 3/16” in height; and
    • for tops 2 inches or less in diameter, the CRV statement must be 1/8” in height.
  • Requirements for box, bladder, and pouch containers to be determined.

3. Currently, there is no exemption for wines or spirits labeled before July 1, 2025.  While the Wine Institute is working on legislation to create an exemption for wines labeled before January 1, 2024, wineries and distilleries should start including the required labeling on all applicable containers as soon as possible.

4. Senate Bill No. 1013 also revised Section 14561(d) of the Bottle Bill to allow for CRV labeling by the inclusion of a scan code or quick response (QR) code on the container. This new language is currently under review by CalRecycle.

EXCEPTION FOR TASTING ROOM SALES:

If any wines or spirits are sold for on-site consumption in a tasting room, then those products are exempt from the Bottle Bill’s requirements. Any products sold for offsite consumption are subject to the requirements of the Bottle Bill. Section 14510.

For more information regarding Bottle Bill compliance, please contact Bahaneh Hobel at [email protected] or Theresa Barton Cray at [email protected].

Monterey County Wines Subject to New Conjunctive Labeling Requirements

Are you planning on bottling and labeling any wines with the name of a Monterey County AVA in the new year?  Then you’ll need to comply with a new conjunctive labeling requirement.  See Cal. Business and Professions Code Sec. 25247.

In 2015, the state legislature passed a law requiring wine labeled with the name of an AVA that is entirely within Monterey County to also include a “Monterey County” designation. This includes the Arroyo Seco, Carmel Valley, and Santa Lucia Highlands AVAs.  The law applies to wines bottled on or after January 1, 2019.

The law does not apply to AVAs that straddle Monterey County and  any other county.  For example, the Chalone AVA bridges Monterey County and Benito County, so a wine labeled with the Chalone AVA is not covered by Sec. 25247.

There is one other exception to the conjunctive labeling requirement:  wines labeled with the Monterey AVA.  This is where things get a little confusing.  Under federal law, a wine can carry the name of a county as an appellation of wine origin.  AVAs are also considered appellations, but in order to carry the name of an AVA, a higher percentage of the grapes must come from that AVA.  In both cases, the wine must be fully finished in the state in which the county or AVA is located (assuming the AVA is entirely within one state).

Federal regulations recognize both a “Monterey County” appellation, as well as a Monterey AVA.  The Monterey AVA is located in Monterey County, but does not cover all of Monterey County (see map below).  Any wine that is labeled with the Monterey AVA is exempt from the California conjunctive labeling requirement found in Cal. Business and Professions Code Sec. 25247.

Monterey County AVAs

For more information regarding conjunctive labeling or wine labeling regulations, please contact John Trinidad.

COLA’s Provide Scant Protection from Class Action Lawsuits

ShipCompliant recently published a guest blog post by DP&F Wine Law attorney John Trinidad on the class action lawsuits claiming that the use of the term “handmade” on vodka bottles constituted false or misleading information under state consumer protection laws.  

Over the past year, a slew of class action lawsuits have been filed claiming that certain alcohol beverage product labels are false or misleading under state consumer protection laws. Tito’s Vodka, owned by a company called Fifth Generation, Inc., faces numerous actions claiming that the company’s use of the term “handmade” deceived consumers by leading them to believe that they were buying high quality, non-massed produced products.

Fifth Generation has fought these allegations, arguing that that TTB’s approval of their label as evidenced by the issuance of a certificate of label approval (“COLA”) protects against liability under state consumer protection laws. The company’s argument relies on “safe harbor” provisions provided for under state law, which in general make certain actions authorized by laws administered by state or federal regulatory authorities immune from liability. Unfortunately for the alcohol beverage industry, this argument has had mixed success.

To read the full blog post, please go to the ShipCompliant website.  

New Paso AVAs Available for Use in November

In early 2006, the Paso Robles AVA Committee (PRAVAC) began an organized outreach effort to growers and vintners across the Paso Robles wine country and kicked off the formal process of gathering historical and scientific evidence that would support the further definition of the distinctive wine regions within the Paso Robles AVA.  For many PRAVAC members, the desire arose much earlier to educate the public about the unique areas within the Paso Robles AVA and how these distinctive qualities in each area impact the wine produced in the region.  In May 2007, the PRAVAC filed eleven petitions with the TTB to establish eleven separate AVAs within the approximately 612,000 acre Paso Robles AVA.

On Thursday, October 9, 2014, the TTB will publish the Final Rule establishing the 11 new AVAs within the Paso Robles AVA.  These new viticultural areas include Adelaida District, Creston District, El Pomar District, Paso Robles Estrella District, Paso Robles Geneseo District, Paso Robles Highlands District, Paso Robles Willow Creek District, San Juan Creek, San Miguel District, Santa Margarita Ranch, and Templeton Gap District.

The effective date for all 11 AVAs will be November 10, 2014 at which time producers of qualifying Paso Robles wine can apply to TTB for COLAs with one of the new AVA names.  The new AVAs can be used on wine of any vintage as long as it is not already bottled and labeled.

DPF has been proud to represent the PRAVAC through this process and sends its congratulations to all of the PRAVAC members and supporters.

http://www.ttb.gov/press/fy14/press-release-fy-15-02.pdf

For additional information regarding AVA petitions, please contact Carol Ritter at [email protected]