“For Sale in Texas Only” (FSITO) – You may have seen this on the label of a Texas wine in the grocery store. It’s even more probable that you didn’t notice it. After all, who reads the entire label on every bottle of wine they pick up? I didn’t until someone I met in the wine community ranted about it several years ago. Unfortunately, I listened to their rant and began to echo the rant to local grocery stores and in other wine groups.

Then I did some research and found out a few things:

Federal (not Texas) labeling regulations prevent wineries from advertising the specific source of the grapes in their wine unless it was grown in the same state as the winery.

The legalese is all below in the article with some reasonable translation, but here’s the quick explanation:

A winery must put an appellation (growing area) on the label of their wine. (This is a good thing, right? I think most consumers would like to know where the grapes were grown in any given bottle of wine.)

HOWEVER (Oh here’s the catch you probably didn’t know about)

If the grapes were grown outside the winery’s state but in the U.S., the appellation on the label must state “American”, 

UNLESS

The state where the grapes were grown border the winery’s state, in which case the appellation may be either the name of the state or “American”

The history of this regulation to the best of my knowledge and research is that it was lobbied for by California wineries to prevent non-California wineries from being able to buy California grapes and advertise them as such. They didn’t want a Texas winery (as an example) to be able to buy Napa Valley grapes and put “Napa Valley” on the label. Evidently the legislators agreed (and continue to agree) that this would be unfair competition. However, the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) do provide for an exception to the federal labeling regulations if the wine will only be sold in the winery’s state. If a winery is granted the exception, they must put the phrase “For Sale in _____ (state name) Only” on the label.

Basically, the exception from some of the TTB labeling regulations exist to allow wineries to provide better information about the grapes used in their wine.

FSITO is not limited to Texas

Since a winery from any state may apply for exception from some of the TTB labeling regulations, it’s more accurate to use the initials FSIxO instead of FSITO. In this case, the lower case “x” is a stand-in for any state’s abbreviation.

What’s wrong with FSIxO

Since FSIxO is an exception from some federal TTB labeling regulations, wineries are as free to omit appellation data from their labels as they are to include it.

Reasons that a winery may apply for the FSIxO exemption:

1. The winery wants to provide detailed and accurate appellation information on the wine label. (The reason for the exception.)
2. The winery wants or needs the flexibility to alter the sourcing and composition of the wine later than it would be possible to apply for and be granted a Certificate of Label Approval (CoLA) following TBB regulations. (I actually heard this from the owner and winemaker at a small winery who would never sell outside the state. This can be deceptive or not depending on the actual underlying reasons for this choice)
3. The winery owner doesn’t want to do all of the work to provide the information or do the paperwork necessary for a CoLA. (There is a lot of accountability to support a CoLA.)
4. The winery owner doesn’t want to put the TBB required appellation on their label. (After all, who wants to buy “American” Cabernet Sauvignon? It just seems cheezy.)
5. The winery wants to fool people into thinking that they are buying wine made from Texas-grown grapes when they really aren’t. (After learning about FSIxO, this is an easy assumption to make.)

In Texas, the result of reasons 2 – 5 (omitting appellation information) often results in customers assuming that some wines from Texas-based wineries were made from grapes grown in Texas when, in fact, the wine was made from grapes grown outside the state. Sometimes customers believe that the grapes were grown in Texas because of the “For Sale in Texas Only” (FSITO) phrase. Since there is no explanation on the bottle of what FSITO means, consumers are left to their own assumptions or to research the phrase on their own.

Without checking with the winery, you don’t know why For Sale in Texas Only has been put on the bottle, so

• Never assume that “For Sale in Texas Only” means that the grapes in the wine aren’t from Texas. They may be. Check with the winery if you have questions
• Check the label for any other information that may give clues or data to the appellation of the grapes.
• If you want to try it, buy it.

and as Russ Kane, the Texas Wineslinger says,

“If you like it, drink it.”

 

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The Law (or The Nitty Gritty)

§ 4.25 Appellations of origin.

(a) Definition—

(1) American wine. An American appellation of origin is: (i) The United States; (ii) a State; (iii) two or no more than three States which are all contiguous; (iv) a county (which must be identified with the word “county”, in the same size of type, and in letters as conspicuous as the name of the county); (v) two or no more than three counties in the same State; or (vi) a viticultural area (as defined in paragraph (e) of this section).
(2) Imported wine. An appellation of origin for imported wine is:

(i) A country;
(ii) A state, province, territory, or similar political subdivision of a country equivalent to a state or county;
(iii) Two or no more than three states, provinces, territories, or similar political subdivisions of a country equivalent to a state which are all contiguous; or
(iv) A viticultural area (as defined in paragraph (e) of this section).

(b) Qualification—

(1) American wine. An American wine is entitled to an appellation of origin other than a multicounty or multistate appellation, or a viticultural area, if:

(i) At least 75 percent of the wine is derived from fruit or agricultural products grown in the appellation area indicated;
(ii) it has been fully finished (except for cellar treatment pursuant to § 4.22(c), and blending which does not result in an alteration of class or type under § 4.22(b)) in the United States, if labeled “American”; or, if labeled with a State appellation, within the labeled State or an adjacent State; or if labeled with a county appellation, within the State in which the labeled county is located; and
(iii) it conforms to the laws and regulations of the named appellation area governing the composition, method of manufacture, and designation of wines made in such place.

The law is written backwards (as most are, it seems), so I’ll translate into English:

For wines produced and bottled in the same state where they are grown, 

If at least 75% of the grapes in the wine were grown in:

• a specific vineyard in a recognized AVA (American Viticultural Area) in the state, the specific vineyard may appear on the label
• a specific county in a recognized AVA (American Viticultural Area) in the state, the specific county may appear on the label
• a specific AVA in a recognized AVA (American Viticultural Area) in the state, the specific AVA may appear on the label

There are additional rules for multi-vineyard, county, and AVA wines, but they are of less concern for this article than wines made from “single source” grapes.

For wines produced and bottled in a state bordering the state in which they were grown (i.e., grown in new Mexico and bottled in Texas), 

If at least 75% of the grapes in the wine were grown in the bordering state, the state from which the grapes were imported (i.e., New Mexico) may appear on the label.

For wines produced and bottled in any state that does not border the state in which they were grown (i.e., grown in California and bottled in Texas),

If at least 75% of the grapes in the wine were grown in the United States, the appellation “America”. must appear on the label.

In other words, If a Texas winery buys grapes or juice from California, by law they cannot advertise that the grapes were grown in California. They can only tell you that the wine is “American” on the label.

There is an important exception to this law that allows for wineries to put that information on the label, but only if the sale of that wine is restricted to the state in which the winery resides. This keeps the wine out of interstate commerce and effectively removes it from federal labeling regulations.

You may apply for a certificate of exemption from label approval for your wine only if it is produced or bottled in the United States and only if it will be sold, offered for sale, shipped, or delivered for shipment within the state in which it was bottled or packed (in other words, it will not be introduced into interstate commerce). This can be accomplished by selecting and completing item 18b on your label application, TTB Form 5100.31. Imported bottled wines are not eligible for a certificate of exemption from label approval and therefore must be covered by a Certificate of Label Approval.

Wines labeled under a certificate of exemption from label approval must show the statement, “For sale in _________(name of State) only.” This statement may be added to a label covered by a certificate of exemption, or may be on an additional label that is affixed to the container. The statement does not have to appear on the label that is submitted to TTB, but must be on the container before it is removed from bond for consumption or sale.

Although the labeling requirements in 27 CFR Part 4, Labeling and Advertising of Wine, do not apply when a certificate of exemption is used, all of the rules in the wine regulations under the Internal Revenue Code of 1986 (IRC), 27 CFR Part 24, continue to apply to all wine bottled and packed in the United States. For example, 27 CFR 24.257(a) outlines what information must appear on your label, as well as the minimum type size requirements, for each bottle or other container of beverage wine prior to removal for consumption or sale. In brief, each label must contain:

Name & Address of the wine premises where bottled or packed
Brand name if different from the above
Alcohol content as percent by volume or as stated in accordance with 27 CFR Part 4
The kind of wine
Net contents
Please see the complete text of 27 CFR 24.257 for additional information and guidance. (Note that Part 24 does not apply in Puerto Rico. See 27 CFR 24.2.)