The phrase “American wine” sets certain expectations. Sunny Chardonnay grown near the California coast. Pinot Noir that tastes like the Oregon forest. Frosty Riesling from the Finger Lakes. You know, terroir.
But just because a bottle says it’s made in the U.S.A. doesn’t mean it’s made from American grapes.
A government loophole has allowed U.S. wine producers to import already-fermented juice from around the world, process and bottle it stateside, and slap on a labeling that says it’s American wine.
This loophole, which has been used by many household name wineries for more than 20 years, could close on June 1, 2026. On January 14, California assemblymembers Damon Connolly and Rhodesia Ransom pushed forward legislation, Assembly Bill AB 1585, that would require wines labeled as American to be, well, 100% American.
If passed, AB 1585 will apply to wine bottled on or after July 1, 2027.
American growers and small producers are breathing a sigh of relief. At a time when many U.S. winemakers are pulling out vines and suffering from low sales, this decades-old program was feeling glaringly unjust.
In 2024, the average American winery experienced a 3.4% decline. Experts predict that between 400,000 and 500,000 tons of grapes in the U.S. were left to rot, resulting in the smallest harvested crop in 20 years.
“Think of how many grapes have been left on the vine,” says Blair Guthrie, winemaker at Stewart Cellars. “Then look at the amount of cheap wine that is being imported—440,000 tons of grapes in bulk wine a year.”
So, why did this even happen in the first place?
Understanding the rule
In 2004, the United States government implemented a duty drawback program with the goal of helping American producers compete on the world wine stage with more competitive prices.The program set out to subsidize wineries for up to 99% of the import duties and alcohol taxes if they exported the same amount of bulk wine within five years. Bring wine in, bottle (and potentially age) it here with U.S. workers, and send it back out. Sounds great, right?
Plus, Alcohol and Tobacco Tax and Trade Bureau (TTB) appellation laws for “American” wine allow domestic bottlings to include up to 25% imported wine in the blend.
If you were a large-scale American winery looking to balance the books at a time when sales are slow, why wouldn’t you look for cheaper international grapes over pricier California fruit?
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