Wine, Law and Costs

Question 1

What three important issues do most wine laws seek to address? Which one is most imperative?

Answer 1

1. Wine should be sound to drink and suitable for humans to ingest;
2. Any information on the label should accurately represent what is actually in the bottle;
3. Ensuring principles are in place that should protect persons and societies from abuse.

Question 2

What winemaking ingredient is of special importance to wine laws in terms of production?

Answer 2

SO₂ (Sulfur dioxide)

In many countries around the world, the words “contains sulfites” have to appear on the label by law if the amount of SO₂ in the wine is above a particular level.

Question 3

In countries that allow the consumption of alcohol, what two areas are controlled by specific laws?

Answer 3

1. A minimum legal age is established for the procurement and consumption of alcohol;
2. A legal limit is set on the amount of alcohol a person can have in his/her blood while operating any kind of vehicle.

Question 4

In what two ways do many governments encourage safe alcohol consumption and safe drinking habits?

Answer 4

1. Many governments make recommendations as to the number of drinks per week adults should consume;
2. Governments set limits on advertising and marketing of alcoholic products to avoid stimulating overconsumption.

Question 5

What are Geographical Indications (GIs)?

Answer 5

Geographical Indications, or GIs, indicate the place where a wine comes from.

Note that Geographical Indications can sometimes be as large as a country or as small as a single vineyard.

Question 6

Which governing body oversees the current system of Geographical Indications used by all significant wine-producing countries?

Answer 6

The World Trade Organization

Question 7

What are the two quality categories of wines with a Geographic Indication in the European Union?

Answer 7

The more stringent Protected Designation of Origin (PDO) and the less rigorous Protected Geographical Indication (PGI).

Question 8

How do Protected Designations of Origin (PDO) and Protected Geographical Indications (PGI) standards differ in the European Union?

Answer 8

As a wide generalization, Protected Designations of Origins (PDOs) are smaller, more delimited areas with more restrictions placed on their production methods.

Protected Geographical Indications (PGIs) are larger areas with more freedom in terms of what winemaking practices can be employed within their boundaries.

Question 9

Why are Protected Designations of Origin (PDO) and Protected Geographical Indications (PGI) designations rarely seen on wine labels using the European Union’s legal terms?

Answer 9

The EU allows appellation designations that were registered before December 31, 2011 to continue to be used on wine labels as long as they fall into the larger European framework introduced in 2009.

This is why you are more likely to see French wines labeled with Appellation d’Origine Controlée (AOC) designates and Italian wines with Denominazione di Origine Controllata (e Garantita) DOC/DOCG designates as there are historic ties as well as quality perceptions that producers and consumers still hold.

Question 10

If a Geographical Indication is stated on a label, how much of that wine customarily comes from the stated GI?

Answer 10

85%

For most countries this is the baseline rule, although there are numerous exceptions throughout the world.

Question 11

In the European Union, if a Protected Designation of Origin (PDO) is used, how much of the wine must come from the stated PDO?

Answer 11

100%

Question 12

What are the three tiers of Geographical Indications seen on French wines?

Answer 12

PDO level: AOC or AC (Appellation d’Origine Contrôlée) or AOP (Appellation d’Origine Protégée)

PGI level: IGP (Indication Géographique Protégée) or VdP (Vin de Pays)

Without GI: Vin de France

Question 13

What are the three tiers of Geographical Indications seen on Italian wines?

Answer 13

PDO level: DOC (Denominazione di Origine Controllata), DOCG (Denominazione di Origine Controllata e Garantita) and DOP (Denominazione di Origine Protetta)

PGI level: IGP (Indicazione Geografica Protetta) and IGT (Indicazione Geografica Tipica)

Without GI: Vino or Vino d’Italia

Question 14

In what ways does the DOCG level differ from the DOC level in Italy?

Answer 14

Denominazione di Origine Controllata (DOC) wines have to be made within specific, delimited geographical areas as well as there being constraints on which grapes can be grown and how they are vinified and matured.

Denominazione di Origine Controllata e Garantita (DOCG) wines must not only satisfy all the DOC regulations, they have to be bottled within the area they are made and they have to go through an tasting/approval process by the Ministry of Agriculture before they can be released.

Question 15

What other labeling terms are defined by Italian wine law?

Answer 15

Classico and Riserva

Classico wines are the wines that have been made solely from a historically classified wine region (which may or may not have expanded beyond its historic boundaries over time).

Riserva wines are a category that carry a specified extended aging regimen, sometimes in oak or bottle (or both), and are usually higher in alcohol.

Question 16

Nearly all wines made outside of the E.U. fall into what category of the E.U.’s hierarchy?

Answer 16

Wines with a GI

Question 17

How do most European wines with a GI (PDO, PGI) differ from non-European wines with a GI (AVA, District, Zone, etc.)?

Answer 17

Non-European wines with a GI rarely have rules or regulations dictating which grapes can be grown within that GI and rarely, if ever, set mandatory vinification methods.

Question 18

Why do European Wine laws have a greater impact on the world wine trade than other laws from around the world?

Answer 18

Since the European Union makes around 60% of the world’s wine and drinks around 50%, European wine laws have the largest impact on wine producers and consumers.

Question 19

What are some of the most common factors that go into the price of wine?

Answer 19

• Production costs
• Packaging
• Transport
• Distribution/Sales
• Taxes
• Retailers and restaurants
• Market factors

Question 20

Where do some of the biggest costs come from when producing wine?

Answer 20

• Growing the grapes
• Winemaking

Question 21

What are some of the things that affect the cost of grape growing?

Answer 21

• Labor (usually biggest expense)
• If land was purchased
  
  • was it an existing vineyard or was it started from scratch?
    
    • would have to buy baby vines, plant them, buy trellising equipment if using
• Soil management

Question 22

What are two ways of lowering production costs?

Answer 22

1. Use seasonal workforce
2. Machine harvesting

Question 23

What are some of the costs that go into winemaking?

Answer 23

• Purchasing and maintaining equipment
• Bottling, be it on-premise or a mobile bottler
• Wine in vessels that aren’t generating any revenue (they’re aging yet taking up space in the winery or cave)

Question 24

What are some of the things that go into packaging costs?

Answer 24

• Bottles
• Labels
• Capsules
• Corks
• Shippers

Question 25

What are some of the things that go into the cost of transporting wine?

Answer 25

• Gasoline
• Trucks and truck drivers (outsourced labor)
• Shipping it across an ocean in a container
• Insurance

Question 26

What is a major market force that can determine the price of a wine, whether it’s in a restaurant or a store?

Answer 26

Consumer demand

When a wine is allocated, in high demand, or if the vintage being released was a short vintage, the prices tend to increase.

Conversely, when wines are not in demand they might have sluggish sales, sit on shelves, or go on sale.

Question 27

What are the 3 types of wine producer?

Answer 27

1. Co-ops
2. Merchants
3. Estates

Question 28

What is a wine co-op (or co-operative)?

Answer 28

Wine “co-ops” are owned by members that cooperate in the business of growing grapes and making wines.

Members grow grapes and bring their grapes to the co-op for processing, bottling, etc. Many growers join co-ops because their production is so small that it doesn’t make financial sense for them to make the wine, bottle it, transport it, and market it themselves.

Co-ops are most common in Europe.

A notable co-op is Produttori del Barbaresco in Piedmont, Italy.

Question 29

In terms of being a wine producer, what is merchant (aka négociant)?

Answer 29

Merchants will buy grapes, juice, or finished wine from growers and/or co-ops. Merchants can be big or small, and they usually make a range of quality levels.

Many big brands are merchants, such as Treasury Wine Estates in the U.S.

Question 30

An Estate wine producer is known as what in France?

Answer 30

Domaine

Question 31

Describe an Estate wine producer.

Answer 31

An Estate wine producer makes wine only from the grapes they grow. This allows them greater control over vineyard management and the entire production process.

Usually Estate or Domaine wines are small production, which means prices tend to be high.

Note: some domaines will purchase grapes to make more wine, and in that case they’ll drop the word “domaine” and replace it with “maison.” An example of this is Domaine Leroy in Burgundy, which uses only estate fruit for their domaine bottling, and Maison Leroy, their label which uses only purchased fruit.