Does changing the bottler or importer name on a Virginia wine label create a new 'brand' that has to be re-registered with ABC?

Plain-English summary

Senator Dick Saslaw asked AG Mark Herring a deceptively technical question that affects how Virginia's wholesale wine market is structured: what information on a wine label actually constitutes the wine's "brand name," and does a change in the bottler or importer name on a label trigger ABC to treat it as a new brand?

Why it mattered: under Virginia's Wine Franchise Act, brand-name registrations and wholesale distributor appointments are organized by brand. If ABC treated a routine bottler-address change as creating a new brand, every such change would ripple through wholesale distribution rights and obligations. The Senator's concern was that ABC's Product Registration User Guide and Product Approval Instructions, which require a new submission whenever "the information written on the label has changed or is amended in any way," were operating as if every label tweak created a new brand.

The AG's analysis:

• Title 4.1 does not define "brand name." The Wine Franchise Act at § 4.1-401 does define "brand": any word, name, group of letters, symbol, or combination "adopted and used by a winery to identify a specific wine product and to distinguish that product from other wine produced or marketed by that winery or other wineries." General corporate logos and advertising messages are explicitly not brands.
• ABC's website and product registration documents appeared to use "brand" and "brand name" interchangeably, so the AG read them as synonymous absent another definition.
• Because the § 4.1-401 definition does not reference the manufacturer, bottler, or importer, and because the manufacturer/bottler/importer information might not be used to identify and market a wine, a change in that information does not, standing alone, necessarily change the brand.
• ABC may still require a label change to be submitted for approval (federal labeling standards apply through 3 VAC § 5-40-20(A)), but its guidance documents are not law. They cannot treat every label change as a new brand in a way that contradicts the statutory definition.

The AG cited the Virginia Court of Appeals in May Brothers (1990) for the proposition that "[a]n erroneous construction by those charged with [a statute's] administration cannot be permitted to override the clear mandates of a statute."

Currency note

This opinion was issued in 2019. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Virginia's Alcoholic Beverage Control Authority (created by § 4.1-101 and governed by a Board of Directors) regulates the possession, sale, transportation, distribution, and delivery of alcoholic beverages in the Commonwealth. The Board has authority under § 4.1-103(20) to set the form and content of all alcoholic beverage labels and seals, and under § 4.1-103(24) to issue regulations.

3 VAC § 5-40-20(A) requires all wine and beer sold in Virginia to be approved as to content, container, and label, and to "conform with regulations adopted by the appropriate federal agency relating to labels, definitions and standards of identity." Applications must be filed "for each new brand and type of wine or beer."

The only definition of "brand" anywhere in Title 4.1 sits in the Wine Franchise Act at § 4.1-401: a word, name, group of letters, symbol, or combination adopted by a winery to identify a specific wine product and distinguish it from other wines. The opinion read this definition in pari materia (alongside related statutes) under Armstrong v. Commonwealth, 263 Va. 573 (2002), so that the same word carries the same meaning across Title 4.1, Title 3 of the Virginia Administrative Code, and ABC guidance documents.

A few stray uses of "brand name" exist elsewhere in the Code (§ 4.1-216 on intellectual property in historical preservation, § 4.1-320 on event sponsorships, 3 VAC § 5-30-60 on wine knobs, 3 VAC § 5-60-50 on farm winery records), but none defines the term.

Common questions

Q: What actually counts as a wine's "brand" under Virginia law?
A: Under § 4.1-401, it's the word, name, letter group, symbol, or combination the winery uses to identify and distinguish a specific wine product. General corporate logos and advertising messages are explicitly excluded.

Q: A winery changes its bottler from Bottler A to Bottler B. Is that a new brand?
A: Per this opinion, no, not standing alone. The manufacturer, bottler, or importer information on a label is not in the statutory definition of "brand," and changing that information does not necessarily change how consumers identify the wine.

Q: Does that mean the winery doesn't have to tell ABC about the change?
A: The opinion is clear that ABC can still require the change to be submitted for label approval (federal labeling rules incorporated through 3 VAC § 5-40-20(A) require this). The point is narrower: ABC cannot treat the resubmission as creating a new "brand" for franchise-registration purposes.

Q: Why does any of this matter for wholesale distributors?
A: Virginia's Wine Franchise Act creates statutory rights and duties tied to brand. Wholesale distributor appointments, territorial exclusivity, and termination rules are organized brand-by-brand. If ABC treated every label edit as a new brand, every distributor relationship would be at risk of being upended by a routine label change.

Q: Can ABC tighten the definition by regulation?
A: The Board has rulemaking authority under § 4.1-103(24). The AG signaled, however, that an interpretation conflicting with the statutory definition would not survive challenge: "[w]hen an agency's statutory interpretation conflicts with the language of the statute ... the usual deference accorded to an agency's interpretation should be withheld."

Q: How does the federal TTB label approval process fit in?
A: 3 VAC § 5-40-20(A) incorporates the federal label, definition, and identity standards (administered by TTB) by reference. So a winery still needs federal approval for label changes; this opinion was only about how Virginia ABC characterizes those changes for brand-registration purposes.

Q: Did the AG decide exactly what change would make a new brand?
A: No, because the statute does not define "brand name" and the question turns on whether the changed element is used to identify and market the wine. The AG's job was to limit overreach, not to draw the line for every fact pattern.

Citations

The opinion is built on § 4.1-401 (definition of brand), §§ 4.1-101, 4.1-103(20), and 4.1-103(24) (ABC Authority and Board powers), 3 VAC § 5-40-20(A) (label approval), Armstrong v. Commonwealth, 263 Va. 573 (2002) (in pari materia construction), and Virginia Department of Mines, Minerals & Energy v. May Brothers, Inc., 11 Va. App. 115 (1990) (agency interpretation can't override clear statutory text). It also relies on the AG's 2017 opinion at 139 about the legal status of agency guidance documents under § 2.2-4001.

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2019/18-061-Saslaw-issued.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Mark R. Herring
Attorney General

Cynthia E. Hudson
Chief Deputy Attorney General

November 15, 2019

202 North Ninth Street
Richmond, Virginia 23219
804-786-2071
Fax 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

The Honorable Richard L. Saslaw
Member, Senate of Virginia
Post Office Box 1856
Springfield, Virginia 22151-0856

Dear Senator Saslaw:
I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You pose three questions regarding what information constitutes a "brand name" for purposes of Title 4.1 of the Code of Virginia and the Virginia Alcoholic Beverage Control (VABC) regulations. Specifically, you ask:

1) What written information appearing on a wine product label constitutes the "brand name" of the wine product for purposes of Title 4.1 and VABC regulations?
2) Does a change only to a previously-registered label's required information concerning the name or address of the manufacturer, bottler, or importer constitute a change of that wine product's "brand name"?
3) Does a change only to a previously-registered label's required information concerning the name or address of the manufacturer, bottler, or importer mean that the wine product is not the same brand as that previously registered?

Background

Your inquiry arises from your understanding that VABC categorizes registrations of wine products and wholesale wine distributor appointments by "brand name." You relate that the term has relevance because VABC's Product Registration User Guide requires the submission of a new product label when "[a]dding, deleting, or changing words in a previously approved label."[1] To the extent that VABC registers the change as a "new product," the registration could create the misimpression that the brand has necessarily changed, which in turn could significantly impact wholesale distributorships and related rights and responsibilities under VABC distribution and sale regulations.

Applicable Law and Discussion

The General Assembly created the Virginia Alcoholic Beverage Control Authority ("the Authority") as an independent political subdivision responsible for controlling "the possession, sale, transportation, distribution, and delivery of alcoholic beverages in the Commonwealth."[2] The Authority acts through its Board of Directors ("Board"),[3] which is vested with the power to promulgate VABC regulations in accordance with the Administrative Process Act and § 4.1-111.[4] With respect to the sale of alcoholic beverages, the Board is authorized to "[d]etermine the nature, form and capacity of all containers used for holding alcoholic beverages ... and prescribe the form and content of all labels and seals to be placed thereon[,]"[5] and to regulate the content, container and label of any wine prior to its sale in the Commonwealth.[6]

Addressing your first two questions, Title 4.1 of the Code of Virginia does not define "brand name," nor has the Board defined this term in its regulations.[7] The Code of Virginia does, however, define the term "brand" as follows:

[A]ny word, name, group of letters, symbol or combination thereof adopted and used by a winery to identify a specific wine product and to distinguish that product from other wine produced or marketed by that winery or other wineries. The use of general corporate logos or symbols or the use of advertising messages, whether appearing on the product packaging or elsewhere, shall not be considered to be a brand, brand extension, or part thereof as these terms are used in this chapter.[8]

In Virginia's statutory context, the "brand" is generally what is used to identify and market a wine. The VABC website allows online searches of a brand of wine by its "active brand name" rather than by "brand," which may be confusing to some users.[9] In addition, the VABC Product Registration User Guide provides instructions on searching for a "brand name" when registering a wine label.[10] While VABC may be using "brand" and "brand name" interchangeably, because there is no statutory or regulatory definition of "brand name," I cannot answer your questions any more definitively concerning what information constitutes the brand name, nor what constitutes a change in the brand name, beyond noting that in the wine label context, VABC appears to be using the term "brand name" synonymously with the term "brand," as that term is defined by the Virginia Code, and that it is used to identify and market a wine.

With respect to your third question, Board regulations require, except in certain limited circumstances, that all wine and beer sold in the Commonwealth shall first be approved as to content, container, and label and "shall conform with regulations adopted by the appropriate federal agency relating to labels, definitions and standards of identity."[11] Virginia regulations also provide for the submittal of applications describing the merchandise "for each new brand and type of wine or beer offered for sale in the Commonwealth."[12]

Because the statutory definition of "brand" does not expressly reference the manufacturer, bottler, or importer of the wine, and such might not be used to identify and market a wine, and because no other Virginia statute or VABC regulation addresses the significance of a change in this information, I am of the opinion that a change in the name or address of the manufacturer, bottler, or importer of the wine does not, standing alone, necessarily constitute a change in the brand of wine.

Certainly, VABC may require that the change in such information on the label be submitted for approval, and it does so by requiring compliance with certain federal regulations relating to labels, definitions and standards of identity.[13] But its guidance documents and registration procedures are not law[14] and must not deem every change on a label to constitute a new brand in a way that is contrary to the statutory definition of "brand" or in a way that is contrary to its own regulations. As the Virginia Court of Appeals stated in Commonwealth v. May Brothers, Inc.:

We are required to construe the law as it is written. "An erroneous construction by those charged with its administration cannot be permitted to override the clear mandates of a statute." Hurt v. Caldwell, 222 Va. 91, 97, 279 S.E.2d 138, 142 (1981). When an agency's statutory interpretation conflicts with the language of the statute or when the interpretation has not been consistently and regularly applied, the usual deference accorded to an agency's interpretation should be withheld. University of Richmond v. Bell, 543 F.Supp. 321, 327 (E.D. Va. 1982).[15]

Conclusion

Because there is no statutory or regulatory definition of "brand name," I cannot definitively answer your questions concerning what information constitutes the brand name of a wine product, nor what constitutes a change in the brand name, beyond noting that in the context of wine labels, VABC appears to be using the term "brand name" synonymously with the term "brand," as that term is defined by § 4.1-401 of the Code of Virginia. Because the statutory definition of "brand" does not expressly reference the manufacturer, bottler, or importer of the wine and such information might not be used to identify and market a wine, and because no other Virginia statute or VABC regulation addresses the significance of a change in this information, I am of the opinion that a change in the name or address of the manufacturer, bottler, or importer of the wine does not, standing alone, necessarily constitute a change in the brand of wine. Accordingly, VABC guidance documents should not deem every change on a label to constitute a new brand in a manner that is contrary to the statutory definition of "brand" or that is contrary to regulations promulgated by the ABC Board.

With kindest regards, I am,
Very truly yours,

Mark R. Herring
Attorney General

1. VIRGINIA ALCOHOLIC BEVERAGE CONTROL AUTH., Product Registration User Guide 159 (Nov. 15, 2013), https://www.abc.virginia.gov/library/licenses/pdfs/productregistrationguide.pdf. Similarly, the VABC Product Approval Instructions state that "a new Virginia approval code number" is needed when "the information written on the label has changed or is amended in any way." VIRGINIA ALCOHOLIC BEVERAGE CONTROL AUTH., Product Approval Instructions (July 2018), https://www.abc.virginia.gov/library/licenses/pdfs/product-approval-instructions-2018.pdf?la=en.

2. VA. CODE ANN. § 4.1-101 (2016) (eff. July 1, 2018).

3. Id.

4. VA. CODE ANN. § 4.1-103(24) (2016) (eff. July 1, 2018).

5. VA. CODE ANN. § 4.1-103(20).

6. 3 VA. ADMIN. CODE § 5-40-20.

7. The term "brand name" is used in a handful of Virginia statutes and regulations, none of which directly relate to wine product labels. See, e.g., VA. CODE ANN. § 4.1-216 (2016) (referencing "brand names owned and trademarked by [a] historical preservation entity" in connection with certain intellectual property agreements); see also VA. CODE ANN. § 4.1-320 (2016) (referencing brand names in the context of advertising sponsorships in racing, competitive, and athletic events); 3 VA. ADMIN. CODE § 5-30-60 (requiring use of brand names on wine knobs provided to retailers); 3 VA. ADMIN. CODE § 5-60-50 (requiring inclusion of brand names in records maintained by farm wineries).

8. VA. CODE ANN. § 4.1-401 (2016). Although this definition of "brand" is expressly made applicable only to the Wine Franchise Act, Virginia rules of statutory construction require that in the absence of an express definition, "we may look to ... related statutes, reading them in pari materia with the statute under consideration, in order to give consistent meaning to the language used by the General Assembly." Armstrong v. Commonwealth, 263 Va. 573, 583, 562 S.E.2d 139, 145 (2002) (citing Lucy v. Cty. of Albemarle, 258 Va. 118, 129, 516 S.E.2d 480, 485 (1999)). Thus, it is my view that the definition of "brand" in the Wine Franchise Act may be used as appropriate in construing Title 4.1 of the Code of Virginia, Title 3 of the Virginia Administrative Code, and VABC guidance documents.

9. VIRGINIA ALCOHOLIC BEVERAGE CONTROL AUTH., Industry Resources: Beer, Wine and Cider, https://www.abc.virginia.gov/licenses/bwc-industry-resources.

10. VIRGINIA ALCOHOLIC BEVERAGE CONTROL AUTH., Product Registration User Guide 15 (Nov. 15, 2013), https://www.abc.virginia.gov/library/licenses/pdfs/productregistrationguide.pdf.

11. 3 VA. ADMIN. CODE § 5-40-20(A).

12. Id.

13. Id.

14. See 2017 Op. Va. Att'y Gen. 139, 142. See also VA. CODE ANN. § 2.2-4001 (Supp. 2019) (defining "guidance document" under the Administrative Procedure Act).

15. Va. Dep't of Mines, Minerals & Energy v. May Brothers, Inc., 11 Va. App. 115, 119, 396 S.E.2d 695, 697 (1990).