The Crush - January 2019 - 1

Volume 46 Issue 1 January 2019


Grape Contracts and Smoke Exposure

By Ted Rieger
Major California wildfires in and near grape growing regions
in recent years have focused attention on the potential impacts
on grape and wine quality resulting from vineyards exposed to
smoke for prolonged time periods.
During the 2018 California winegrape harvest, grape buyers cited
smoke taint concerns as reasons to reject grapes from growers
under contract, notably from vineyards in Lake and Mendocino
counties. Lake County growers reported estimates of 1,500 tons
of sauvignon blanc rejected, rejections of red varieties considered
to be susceptible to smoke exposure, and 2018 revenue losses of
$37.1 million related to smoke exposure.
Allied Grape Growers (AGG) President Jeff Bitter provided
perspective - based on observations from the 2017 and 2018
harvests - on how parties dealt with vineyard smoke exposure.
"In 2017, some wineries took in grapes regardless of smoke
exposure levels, and ended up suffering economic losses due to
wine that could not be sold or had to be used in lower price tier
programs," Bitter said. "In 2018, the growers suffered more as the
wineries overcorrected, and in some cases, buyers were so afraid
of smoke taint that they tried to avoid everything with any level
of exposure, and they seemed to be stretching to find clauses in
contracts to reject grapes."
Bitter said the wine industry needs to address three areas:
* Standards, including research to address testing, and chemical
markers and measurements to determine acceptable and
unacceptable smoke exposure levels.
* Grape contracts with more specific language.
* Crop insurance to mitigate losses.
Understanding the effects of smoke exposure
and the impacts on wine quality have been
studied in Australia since 2003 and more
recently by researchers from UC Davis and

Sonoma County vineyards near the wildfires in fall 2017. Photo: Brian Shepard

Washington State University. In November 2018, CAWG, Lake
County Winegrape Commission, Lake County Farm Bureau,
Mendocino Winegrowers Inc. and Mendocino County Farm
Bureau joined together to request Congress include the state's
winegrape growers in a disaster assistance bill. Specifically, they
asked lawmakers to support funding for research to prevent and
limit the effect of smoke on winegrapes during wildfires, develop
testing protocols and thresholds for smoke compounds, and
establish uniform standards.
Attorney John McCarron of Downey Brand LLC in Sacramento
provided legal background on smoke exposure and how grape
contract language and interpretations were used during the 2017
and 2018 harvests. Downey Brand has growers and wineries/
grape buyers as clients. McCarron said smoke taint is not defined
in statute or regulations. Those in the industry must refer to
industry customs and practices when interpreting contracts and
parties' actions. However, there is no standardized or consistent


The Crush - January 2019

Table of Contents for the Digital Edition of The Crush - January 2019

The Crush - January 2019 - 1
The Crush - January 2019 - 2
The Crush - January 2019 - 3
The Crush - January 2019 - 4
The Crush - January 2019 - 5
The Crush - January 2019 - 6
The Crush - January 2019 - 7
The Crush - January 2019 - 8