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There was never much question that Calistoga would be recognized as its own unique grape-growing region, as it was last week by federal regulators.

The area surrounding the tourist town at the toasty northern tip of the Napa Valley had a unique enough climate, geography, and grape-growing history to justify having an American Viticultural Area all its own.

The thorny question that vexed regulators and sparked a fierce truth-in-labeling debate was whether two wineries using Calistoga in their names ? but not many Calistoga grapes in their wines ? should be exempted from the new rules.

The 300-member Napa Valley Vintners and owners of the most storied Calistoga winery, Chateau Montelena, argued that exempting the two wineries would confuse consumers and jeopardize both the Napa Valley?s reputation and the integrity of the entire AVA system.

Others saw a David-versus-Goliath battle that left two small wineries threatened with extinction at the hands of large, entrenched winery interests.

Calistoga Cellars, established in 1998, started a ?Stand Up for the Little Guy? letter-writing campaign. It joined with Calistoga Estate, established in 2005, in arguing the new rules would have a devastating financial impact on their operations.

But after six years of review, regulators last week passed the new rules establishing the Calistoga AVA with no exemptions, a decision hailed as the latest victory for truth-in-labeling in the wine industry.

?It has been a long road, but like the incredible wines made in Calistoga, we will savor this wonderful news,? Rep. Mike Thompson, D-St. Helena, said in a statement.

The 2007 proposal to allow grandfathering was not specific just to Calistoga, but would have opened the door to similar exemptions in AVAs across the nation, said Rex Stults, industry relations director for the Napa Valley Vintners.

?If these changes went through, wine labels would effectively have no meaning,? Stults said.

The dispute began in 2003, when Bo Barrett, co-owner of Chateau Montelena, asked federal regulators to recognize the Calistoga area as the 15th sub-appellation in the Napa Valley.

The federal Alcohol and Tobacco Tax and Trade Bureau, which approves the wording of all labels on alcoholic beverages, proposed approving the new grape-growing area in 2007. But it also proposed exempting one of the two wineries ? Calistoga Cellars ? from the requirement to make its wines from at least 85 percent Calistoga-area grapes.

The agency seemed hesitant to take sides in the dispute.

?We do not believe that ? it is an appropriate government role to make choices between competing commercial interests, if such choices can be avoided,? the TTB wrote at the time.

Stults said the agency was looking for an easy way out of a tough spot.

?I think that the bureaucrats in D.C. were uncomfortable making a difficult decision,? Stults said. ?It was clear to us they did not understand the importance of the terrible precedent that they were proposing.?

The election of a new administration was critical to breaking what had become a deadlock on the issue, Stults said. Thompson made the issue a high priority, and was able to impress upon the White House and the Treasury Department that exemptions to labelling laws were a bad idea.

?I just think that he had a more receptive audience than he had previously,? Stults said.

Thompson issued a celebratory statement, calling the decision a ?tremendous victory? and ?a long overdue and much deserved distinction? for the region.

For Calistoga Cellars and Calistoga Estate, the ruling is nothing to celebrate. In three years, both will be forced to either change their names or alter their business models. At least 85 percent of the grapes will need to come from the Calistoga region if the wineries intend to keep their names.

Calistoga Cellars co-owner Roger Louer has said it was unfair for the government to change the rules after he and his partners have spent millions building up the wine?s position in 30 markets around the nation.

His partner, co-owner Robert Young had no comment on the 48-page ruling Monday.

?In due course we will issue a press release and move on,? Young said.

Napa Valley vintners have shown little tolerance for Calistoga Cellars? quest for an exemption. They contend the winery ? which has a tasting room in downtown Calistoga but makes its wines in Ukiah using grapes from various parts of the Napa Valley ? is misleading consumers.

Stults calls the winery?s efforts to characterize the fight as a small winery standing up for its rights against powerful interest groups ?hogwash.? Most of the wineries in the group are far smaller than the 10,000-case Calistoga Cellars, he said.

?The idea that the Napa Valley Vintners is some special interest group lobbying to stamp our competition for our members couldn?t be further from the truth,? Stults said.