Proposed Establishment of the San Luis Rey Viticultural Area

AGENCY:

Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

The Alcohol and Tobacco Tax and Trade Bureau (TTB) proposes to establish the 97,733-acre “San Luis Rey” American viticultural area (AVA) in San Diego County, California. The proposed AVA is located entirely within the existing South Coast AVA. TTB designates viticultural areas to allow vintners to better describe the origin of their wines and to allow consumers to better identify wines they may purchase. TTB invites comments on these proposals.

DATES:

TTB must receive your comments on or before October 30, 2023.

ADDRESSES:

You may electronically submit comments to TTB on this proposal and view copies of this document, its supporting materials, and any comments TTB receives on it within Docket No. TTB–2023–0007 as posted on Regulations.gov ( https://www.regulations.gov ), the Federal e-rulemaking portal. Please see the “Public Participation” section of this document below for full details on how to comment on this proposal via Regulations.gov or U.S. mail, and for full details on how to obtain copies of this document, its supporting materials, and any comments related to this proposal.

FOR FURTHER INFORMATION CONTACT:

Karen A. Thornton, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005; phone 202–453–1039, ext. 175.

SUPPLEMENTARY INFORMATION:

Background on Viticultural Areas

TTB Authority

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. The FAA Act provides that these regulations should, among other things, prohibit consumer deception and the use of misleading statements on labels and ensure that labels provide the consumer with adequate information as to the identity and quality of the product. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the FAA Act provisions pursuant to section 1111(d) of the Homeland Security Act of 2002, as codified at 6 U.S.C. 531(d). In addition, the Secretary of the Treasury has delegated certain administrative and enforcement authorities to TTB through Treasury Order 120–01.

Part 4 of the TTB regulations (27 CFR part 4) authorizes TTB to establish definitive viticultural areas and regulate the use of their names as appellations of origin on wine labels and in wine advertisements. Part 9 of the TTB regulations (27 CFR part 9) sets forth standards for the preparation and submission of petitions for the establishment or modification of American viticultural areas (AVAs) and lists the approved AVAs.

Definition

Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) defines a viticultural area for American wine as a delimited grape-growing region having distinguishing features as described in part 9 of the regulations and, once approved, a name and a delineated boundary codified in part 9 of the regulations. These designations allow vintners and consumers to attribute a given quality, reputation, or other characteristic of a wine made from grapes grown in an area to the wine's geographic origin. The establishment of AVAs allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of an AVA is neither an approval nor an endorsement by TTB of the wine produced in that area.

Requirements

Section 4.25(e)(2) of the TTB regulations (27 CFR 4.25(e)(2)) outlines the procedure for proposing an AVA and allows any interested party to petition TTB to establish a grape-growing region as an AVA. Section 9.12 of the TTB regulations (27 CFR 9.12) prescribes standards for petitions to establish or modify AVAs. Petitions to establish an AVA must include the following:

• Evidence that the area within the proposed AVA boundary is nationally or locally known by the AVA name specified in the petition;
• An explanation of the basis for defining the boundary of the proposed AVA;
• A narrative description of the features of the proposed AVA that affect viticulture, such as climate, geology, soils, physical features, and elevation, that make the proposed AVA distinctive and distinguish it from adjacent areas outside the proposed AVA boundary;
• The appropriate United States Geological Survey (USGS) map(s) showing the location of the proposed AVA, with the boundary of the proposed AVA clearly drawn thereon;
• If the proposed AVA is to be established within, or overlapping, an existing AVA, an explanation that both identifies the attributes of the proposed AVA that are consistent with the existing AVA and explains how the proposed AVA is sufficiently distinct from the existing AVA and therefore appropriate for separate recognition; and
• A detailed narrative description of the proposed AVA boundary based on USGS map markings.

Petition To Establish the San Luis Rey AVA

TTB received a petition from Rebecca Wood, managing member of Premium Vintners, LLC, proposing to establish the “San Luis Rey” AVA. Premium Vintners, LLC, operates Fallbrook Winery and farms several vineyards within the proposed AVA. The petition was submitted on behalf of Fallbrook Winery and other local vineyard owners and winemakers. The proposed AVA is located in San Diego County, California, and is entirely within the existing South Coast AVA (27 CFR 9.104). Within the proposed AVA, there are approximately 44 commercial vineyards, which cover a total of approximately 256 acres, as well as an additional 29 acres of planned vineyards. There are also 23 wineries within the proposed AVA. The distinguishing features of the proposed San Luis Rey AVA are its topography, climate, and soils.

Proposed San Luis Rey AVA

Name Evidence

The proposed San Luis Rey AVA takes its name from the San Luis Rey River watershed, which includes most of the proposed AVA. According to the petition, the topography of the San Luis Rey River valley has a major effect on the climate of the proposed AVA. The river is named for the Mission San Luis Rey de Francia, which was established by Franciscan monks on a hill overlooking the valley in 1798. The petition states that the monks established a tradition of growing wine grapes in the region, with one contemporary noting in his memoires that the monks' “gardens produce the best olives and the best wine in all California.”

One of the USGS quadrangle maps used to create the boundary of the proposed AVA is titled “San Luis Rey, CA.” “San Luis Rey” also appears on that map as the name of a community within the proposed AVA. The petition provides a printout from a real estate website showing homes for sale within the proposed AVA under the heading “San Luis Rey Real Estate.” Finally, the petition includes examples of several business within the proposed AVA that use the name “San Luis Rey,” including the San Luis Rey Bakery and Restaurant, the San Luis Rey Training Center, and the San Luis Rey Equine Hospital.

Boundary Evidence

The proposed San Luis Rey AVA is located within the San Luis Rey River valley. According to the petition, Interstate Highway 5 forms the western boundary and separates the proposed AVA from a narrow strip of densely populated land that is not suitable for commercial viticulture. West of this strip of land is the Pacific Ocean. The boundary of the Marine Corps Base Camp Pendleton, which is unavailable for commercial viticulture, forms the northwest portion of the proposed AVA boundary. The shared San Diego-Riverside County line forms the northern boundary of the proposed AVA, and Interstate Highway 15 forms the eastern boundary. Both of these boundaries exclude lands with higher mean annual temperatures than those found in the proposed AVA. The proposed southern boundary follows State Highway 78 to exclude lands with higher mean annual temperatures and different soils than are found in the proposed AVA.

Distinguishing Features

According to the petition, the distinguishing features of the proposed San Luis Rey AVA are its topography, climate, and soils. The Pacific Ocean is to the west of the proposed AVA, so distinguishing feature information was not provided for that region.

Topography

The petition states that the proposed San Luis Rey AVA is a mostly hilly region along the San Luis Rey River valley. Elevations increase from 5 feet to 1,796 feet as one moves farther from the coast. The mean elevation within the proposed AVA is 563 feet. Slope angles within the proposed AVA average 10 degrees.

According to the petition, the low elevations allow cool marine air from the Pacific Ocean to flow through the proposed AVA, moderating temperatures. Afternoon breezes also help prevent fungal diseases such as powdery mildew by reducing the moisture on the vines caused by morning low cloud cover. Finally, the petition notes that the low elevations and a terrain consisting of gently rolling hills open to marine air almost eliminate the risk of spring frosts, which can affect vine growth at the beginning of the growing season. See the following Climate section for supporting evidence.

To the north of the proposed San Luis Rey AVA, within the established Temecula Valley AVA (27 CFR 9.50), elevations are higher, ranging from 575 to 2,831 feet with a mean elevation of 1,508 feet. The slopes are similar to those in the proposed AVA, with a mean slope angle of 10 degrees. To the south, within the established San Pasqual Valley AVA (27 CFR 9.25), the minimum elevation is higher than within the proposed AVA, at 304 feet, and the maximum elevation is lower at 725. However, the mean elevation within the San Pasqual Valley AVA is lower than that of the proposed AVA, at 408 feet. The mean slope angle within the San Pasqual Valley AVA is also shallower, at 6 degrees. To the southeast of the proposed AVA, within the established Ramona Valley AVA (27 CFR 9.191), elevations are higher, ranging from 680 to 3,133 feet, with a mean elevation of 1,766 feet. The slope angles within the Ramona Valley AVA are also steeper, with a mean of 12 degrees. The petition did not provide an exact range of elevations for the region to the east of the proposed AVA but did include a graphic showing elevations within the southern portion of California, indicating higher elevations.

Climate

According to the petition, the proximity of the proposed San Luis Rey AVA to the Pacific Ocean moderates the temperature extremes, generally resulting in mild winters and summers with lower maximum temperatures than regions farther inland. As evidence of the milder temperatures, the petition included information on the average annual mean temperature, average annual maximum temperature, average peak ripening and harvest season maximum temperature, and growing degree day (GDD) for the proposed AVA and the surrounding regions. The information is set forth in the following tables and was gathered from the 1981–2010 climate normal dataset from PRISM Climate Group, Oregon State University.

As shown in the preceding tables, the proposed San Luis Rey AVA has a lower average annual mean temperature, lower average annual maximum temperature, lower peak ripening and growing season temperatures, and fewer GDDs than the regions to the north and south. The proposed AVA has a higher average annual mean temperature and a greater number of mean GDDs than the region to the southeast. However, the maximum and minimum GDDs for the proposed AVA are still lower than those of the region to the southeast, as are the average annual maximum temperature and average peak ripening and harvest season temperatures. The petition notes that mild temperatures, particularly during peak ripening and harvest season, affect viticulture, as prolonged temperatures over 90 degrees F can cause loss of flavor and aroma compounds in grapes.

As noted above, the petition states that the proposed AVA experiences very little frost that occurs early in the season or late in autumn. Consequently, frost does not affect grape vine growth or ripening consistency in the proposed AVA. As evidence, the petition included the average number of days from 1981–2010 with temperatures at or below 32 degrees F for two locations within the proposed AVA, ranging from 0.8 to 4.7 days. The data were collected using the National Oceanic and Atmospheric Administration climate normal dataset.

The petition also includes information about diurnal temperature variation, which it describes as the average monthly minimum temperature subtracted from the average monthly maximum temperature.⁹ The data, shown in the following table, provide the temperature difference for the peak growing and harvest season and show that the proposed San Luis Rey AVA has smaller temperature differences than the surrounding regions. The petition states that temperature differences help preserve the balance of sugar and natural fruit acidity in grapes.

Finally, the petition compared annual precipitation amounts in the proposed San Luis Rey AVA to those of the surrounding regions. The proposed AVA has lower annual precipitation amounts than the regions to the north and southeast and slightly higher amounts than the region to the southeast. According to the petition, high amounts of rainfall during the spring and the grape ripening season can disrupt bloom formation, split fruit, and disrupt the ripening process.

Soils

According to the petition, nearly 50 percent of the soils in the proposed San Luis Rey AVA belong to the Alfisols soil taxonomy order. Soils in this order have relatively high native fertility and high concentrations of calcium, magnesium, potassium, and sodium, which are essential plant nutrients. The soils of the proposed AVA are also relatively low in organic carbon. The petition states that soils with low levels of organic carbon decrease grapevine vigor, leading to smaller canopies, clusters and berries. The smaller clusters and berries enhance the flavor concentration in the grapes and increase the skin-to-juice ratio during fermentation, while fewer leaves on the vines lead to improved fruit color and a reduction in “green” flavors. Approximately 69 percent of the soils in the proposed AVA are sandy loams, which the petition describes as an even mixture of soil separates that can hold water while draining and aerating well, and is easily worked with agricultural tools. Sandy loams also have low cation exchange capacity, which reduces the ability of vines to absorb nutrients from the soil and prevents overly vigorous growth. The main soil series within the proposed AVA are the Las Posas, Fallbrook, and Cieneba series, and the primary parent materials of these soils are granite and granodiorite (28.85 and 19.54 percent, respectively).

To the north of the proposed San Luis Rey AVA, within the established Temecula Valley AVA, the majority of soils are also within the Alfisols soil taxonomy order (48 percent). However, the region also has more soils in the Entisols and Mollisols orders than are found within the proposed AVA. The primary parent materials of the soils are granite and sandstone. To the south of the proposed AVA, within the established San Pasqual AVA, the soils are primarily within the Alfisols order, but lower amounts than the proposed AVA (33 percent). Entisols and Mollisols also occur with greater frequency within the San Pasqual AVA. The primary parent material is granite (77.48 percent), followed by granodiorite (13.45 percent). To the southeast of the proposed AVA, in the established Ramona Valley AVA, there are slightly fewer soils in the Alfisols order (46 percent) and more soils in the Entisols order (26 percent) than are found in the proposed AVA. The primary parent materials are granite and granodiorite, which are found in greater numbers than within the proposed AVA (36.60 and 35.23 percent, respectively).

Comparison of the Proposed San Luis Rey AVA to the Existing South Coast AVA

T.D. ATF–218, published in the Federal Register on November 21, 1985 (50 FR 48084), established the South Coast AVA. It describes the primary feature of the South Coast AVA as the “substantial coastal influence” on the climate. The proposed San Luis Rey AVA shares the marine-influenced climate of the larger South Coast AVA. For example, the petition notes that the mean average annual temperature for the proposed AVA is 63.11 degrees F, which is the same as the entire South Coast AVA. Additionally, the average annual maximum temperature is 74.20 degrees F for the proposed AVA and 74.99 degrees F for the South Coast AVA. However, due to its much smaller size, the proposed AVA is more uniform in its other distinguishing features than the large, multi-county South Coast AVA. The petition states, for example, that the proposed AVA is hilly with a lower mean elevation and more consistent terrain than the South Coast AVA, which ranges from the Pacific Ocean to mountainous elevations northeast and southeast. Only about one third of the soil series that exist within the South Coast AVA are also present within the proposed San Luis Rey AVA. Furthermore, the three most common soil series in the proposed AVA—Las Posas, Fallbrook, and Cieneba—make up 34.9 percent of the total soils in the proposed AVA, but only comprise 20.3 percent of the South Coast AVA soils.

TTB Determination

TTB concludes that the petition to establish the 97,733-acre “San Luis Rey” AVA merits consideration and public comment, as invited in this document.

Boundary Description

See the narrative boundary descriptions of the petitioned-for AVA in the proposed regulatory text published at the end of this document.

Maps

The petitioner provided the required maps, and they are listed below in the proposed regulatory text. You may also view the proposed San Luis Rey AVA boundary on the AVA Map Explorer on the TTB website, at https://www.ttb.gov/wine/ava-map-explorer.

Impact on Current Wine Labels

Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. For a wine to be labeled with an AVA name or with a brand name that includes an AVA name, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible for labeling with an AVA name and that name appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the AVA name appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label. Different rules apply if a wine has a brand name containing an AVA name that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details.

If TTB establishes this proposed AVA, its name, “San Luis Rey,” will be recognized as a name of viticultural significance under § 4.39(i)(3) of the TTB regulations (27 CFR 4.39(i)(3)). The text of the proposed regulation clarifies this point. Consequently, wine bottlers using “San Luis Rey” in a brand name, including a trademark, or in another label reference as to the origin of the wine, would have to ensure that the product is eligible to use the viticultural area's name, “San Luis Rey.” The approval of the proposed San Luis Rey AVA would not affect any existing AVA, and any bottlers using “South Coast” as an appellation of origin or in a brand name for wines made from grapes grown within the San Luis Rey AVA would not be affected by the establishment of this new AVA. If approved, the establishment of the proposed San Luis Rey AVA would allow vintners to use “San Luis Rey”, “South Coast”, or both AVA names as appellations of origin for wines made from grapes grown within the proposed AVA, if the wines meet the eligibility requirements for the appellation.

Public Participation

Comments Invited

TTB invites comments from interested members of the public on whether TTB should establish the proposed San Luis Rey AVA. TTB is interested in receiving comments on the sufficiency and accuracy of the name, boundary, topography, and other required information submitted in support of the AVA petition. In addition, because the proposed San Luis Rey AVA would be within the existing South Coast AVA, TTB is interested in comments on whether the evidence submitted in the petition regarding the distinguishing features of the proposed AVA sufficiently differentiates it from the existing AVA. TTB is also interested in comments on whether the geographic features of the proposed AVA are so distinguishable from the South Coast AVA that the proposed San Luis Rey AVA should not be part of the established AVA. Please provide any available specific information in support of your comments.

Because of the potential impact of the establishment of the proposed San Luis Rey AVA on wine labels that include the term “San Luis Rey,” as discussed above under Impact on Current Wine Labels, TTB is particularly interested in comments regarding whether there will be a conflict between the proposed area names and currently used brand names. If a commenter believes that a conflict will arise, the comment should describe the nature of that conflict, including any anticipated negative economic impact that approval of the proposed AVA will have on an existing viticultural enterprise. TTB is also interested in receiving suggestions for ways to avoid conflicts, for example, by adopting a modified or different name for the proposed AVA.

Submitting Comments

You may submit comments on this notice by using one of the following methods:

• Federal e-Rulemaking Portal: You may send comments via the online comment form posted with this notice within Docket No. TTB–2023–0007 on “ Regulations.gov, ” the Federal e-rulemaking portal, at https://www.regulations.gov. A direct link to that docket is available under Notice No. 225 on the TTB website at https://www.ttb.gov/wine/notices-of-proposed-rulemaking. Supplemental files may be attached to comments submitted via Regulations.gov. For complete instructions on how to use Regulations.gov, visit the site and click on the “FAQ” link at the bottom of the page.

• U.S. Mail: You may send comments via postal mail to the Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005.

Please submit your comments by the closing date shown above in this notice. Your comments must reference Notice No. 225 and include your name and mailing address. Your comments also must be made in English, be legible, and be written in language acceptable for public disclosure. TTB does not acknowledge receipt of comments, and TTB considers all comments as originals.

In your comment, please clearly state if you are commenting for yourself or on behalf of an association, business, or other entity. If you are commenting on behalf of an entity, your comment must include the entity's name, as well as your name and position title. If you comment via Regulations.gov, please enter the entity's name in the “Organization” blank of the online comment form. If you comment via postal mail or hand delivery/courier, please submit your entity's comment on letterhead.

You may also write to the TTB Administrator before the comment closing date to ask for a public hearing. The TTB Administrator reserves the right to determine whether to hold a public hearing.

Confidentiality and Disclosure of Comments

All submitted comments and attachments are part of the rulemaking record and are subject to public disclosure. Do not enclose any material in your comments that you consider confidential or that is inappropriate for disclosure.

TTB will post, and you may view, copies of this document, the related petition and selected supporting materials, and any comments TTB receives about this proposal within the related Regulations.gov docket. In general, TTB will post comments as submitted, and it will not redact any identifying or contact information from the body of a comment or attachment.

Please contact TTB's Regulations and Rulings division by email using the web form available at https://www.ttb.gov/contact-rrd, or by telephone at 202–453–2265, if you have any questions about commenting on this proposal or to request copies of this document, the related petition and its supporting materials, or any comments received.

Regulatory Flexibility Act

TTB certifies that this proposed regulation, if adopted, would not have a significant economic impact on a substantial number of small entities. The proposed regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name would be the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.

Executive Order 12866

This proposed rule is not a significant regulatory action as defined by Executive Order 12866. Therefore, it requires no regulatory assessment.

List of Subjects in 27 CFR Part 9

• Wine

Proposed Regulatory Amendment

For the reasons discussed in the preamble, we propose to amend title 27, chapter I, part 9, Code of Federal Regulations, as follows:

PART 9—AMERICAN VITICULTURAL AREAS

1. The authority citation for part 9 continues to read as follows:

Authority: 27 U.S.C. 205.

Subpart C—Approved American Viticultural Areas

2. Add § 9.__ to read as follows: