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Wine Laws & Systems

Thankfully, basic wine laws and systems are pretty straightforward. (It takes more deduction to tell the taste differences between Pinot Noir and Merlot.) Wine is regulated by regional, state and local laws for everything from wine origin to labeling and distribution.

United States Regulation Basics

All federal beverage alcohol laws are governed by the Alcohol and Tobacco Tax and Trade Bureau, known as TTB.

To dig a little deeper into details about prohibition, distribution and retail, slide to the right for more content.


One of America's worst ideas, Prohibition (the 18th Amendment/Volstead Act) halted the growing wine industry and lasted from 1920 until 1933.

Legally, the United States went "dry" during this time, when producing, importing, transporting and selling alcohol were illegal. Prohibition jump-started underground activities, like speakeasies and at-home winemaking, which may have helped grow the American wine industry.

When the 21st Amendment repealed Prohibition, a series of laws and ratifications were introduced to welcome regulated alcohol back into the American lifestyle.


At the federal level, a “three-tiered” system, established after Prohibition, dictates selling procedures. Producers sell only to distributors, who sell only to retailers. But before you spill your Syrah in confusion, know that state and local laws have a say, too. Many states, like California, function as open markets — with different sets of regulations for manufacturing, distribution and sales. Utah is a notable exception, with some of the most restrictive alcohol regulations in the country. As a best practice, know the rules of your state and enlist experts if you have questions. The same can be said for shipping, which is a patchwork of national, international and local regulations.


The TTB does not license retailers, which sell wine directly to consumers. States (and sometimes cities or counties) are held responsible for regulating retail zoning, licensing and permitting. State, regional and local entities also govern wine services, storage and other nuances.

Regional Appellation Systems

One of the most bewildering nuances of wine is the system for appellation, or "place of origin." As a novice, you don't have to know it all. But you do need to know it exists.

You might see letters as an element on a label, as appellation regulations can apply to boundary designations, grape varieties grown and winemaking practices, which often have an internal tiered structure.

These regulations were born out of the terroir concept — meaning the elements of a place create wines that faithfully express their origin. As such, appellation control helps guarantee place-based authenticity. It also influences reputation, economics and the perception of quality. Just as we expect something different from a Spanish Rioja than a Texas Tempranillo, we might even pay more for that label designation.

Many places have systems for regulating agricultural origin — from France to South Africa to New Zealand. Here are some examples:

European Union's PDO and PGI

The European Union (EU), with more than two dozen countries, is the world's largest wine economy — producing roughly 70 percent of the world's wine. To maintain consistency across the EU, a labeling system was created and adjusted over time. Created in 2011, the Protected Designation of Origin (PDO) regulates products that are "produced, processed and prepared in a given geographical area, using recognized know-how." It works in tandem with the Protected Geographical Indication (PGI), which has less strict production rules.

Notably, each EU country has its own appellation systems — many of which are older than the EU system — that align within the PDO system and PGI quality categories.

Modeled on France's AOC: Appellation d’Origine Contrôlée

Initiated in 1935, the AOC regulates France's wine, food and other agricultural products, and is recognized as the model for appellation systems worldwide. France has more than 450 AOCs governing geographic area, allowable grapes, vine age, alcohol levels, harvest methods, production and cellaring.

Several countries have similar systems, including these:

  • Spain (DO)
  • Italy (DOC)
  • Germany (Prädikatswein)
  • Australia (GI)

United States Appellation System: American Viticultural Area (AVA)

An AVA is a federally recognized growing region. As of 2016, there were over 230 AVAs nationwide. Unlike most European wine appellations of origin, an AVA specifies only a geographical location from which at least 85 percent of the grapes used to make a wine must have been grown. The first AVA designation was Augusta, Missouri. The second was Napa Valley.

Estate Classification

In addition to the appellation system, some countries have classifications for specific estates/chateaus or vineyards. These also determine pricing structures. Here are some wine regions that commonly have estate classifications:

  • Champagne wine region
  • Classification of Bordeaux wine estates
  • Burgundy's Grand Cru vineyards
  • Italy's Barolo and Barbaresco Cru vineyards

Aging Classification

Beyond the appellation classifications listed above, most regions have additional layers designated by age — with higher classifications indicating longer times in the barrel. Depending on the region, there may be several levels, each with its own requirement.

In the Rioja DO, for instance, there are three levels for red wine:

  1. GRAN RESERVA: 5 years (including 18 months in cask)
  2. RESERVA: 3 years (including 1 year in cask)
  3. CRIANZA: 2 years (including 6 months in cask)
"In oak .... the wine aromas and flavors — the vanilla, the toastiness, the yeasty, bread-like character — all of that comes from oak. And then the second thing you have going on ... is the exchange of oxygen between the wine inside the barrel and the environment in the cellar where you age your wine."
— Juan Munoz-Oca