Cellaring in The Sea? Currently Unpermitted

Winemakers around the world have tried unique fermentation processes, but a California company might just take the (crab) cake for its efforts to cellar wine at the bottom of the sea. Co-founders of Ocean Fathoms posited that fermenting wine in the ocean’s cold temperatures and currents would enhance the flavor of the wine. Unfortunately, the company didn’t get the necessary permits before testing the waters. Now, California Coastal Commission staff has recommended denial of their after-the-fact permit application, and the winemakers’ plans might be sunk. Cal. Coastal Comm’n, Staff Report: Application No. 9-20-0458 (June 18, 2021).

Ocean Fathoms began its innovative wine production enterprise in 2016 offshore of Santa Barbara County, occasionally deploying wine storage devices to the seafloor as a “proof of concept.” In March 2019, the company began its endeavor in earnest, placing a 64 cubic feet steel wine storage cage less than a mile offshore Fernald Point in Montecito. The cage remained there for a year until the company replaced it with two more cages. Ocean Fathoms never received a permit or authorization from any state or federal agencies for these activities. The U.S. Army Corps of Engineers (Corps) learned of the cages in June 2020 and alerted the California Coastal Commission (Commission), the state agency charged with permitting development activities in state waters.

Commission enforcement staff issued a formal notice of violation to Ocean Fathoms in February 2021. The notice stated that the operations required approval from the Commission and other state and federal agencies, including the Corps, the California State Lands Commission, and the Regional Water Quality Board, and demanded the company remove the cages by February 15. After a one-month extension, the company removed the cages on March 13, 2021. The company made the most of the removal, partnering with a Beverly Hills wine store to sell tickets for a luxury boat trip for the occasion. Emily C. Dooley, Chardonnay-Under-the-Sea Goes a Bit Too Far Even in Wine Country, Bloomberg Law (July 19, 2021). Passengers, who paid $1,000 per ticket, viewed the cage removal and received sea-life encrusted wine bottles to take home. Id.

As the Commission contemplated whether the company had violated state law, Ocean Fathoms submitted an application for after-the-fact authorization for the activity. In the application, the company sought permission for the future installation and operation of six new storage cases on the seafloor, which would cover approximately an eight-foot by sixteen-foot area. The storage cages, which could contain up to 800 wine bottles each, would be brought to the surface every three months to replace or rotate the bottles. The cages would not be marked with surface buoys but rather located through GPS coordinates and divers.

The Commission staff ultimately issued a report recommending that the Commission deny the application. The report noted several barriers to authorizing the venture, including impacts to marine life and other ocean users. The report concluded that the application’s fatal flaw, however, is the potential violation of Section 30233(a) of the California Coastal Act, which delineates seven allowable diking, filling, or dredging activities in open coastal waters. In pre-application discussions, the Commission staff had noted that the project did not seem to fall under any of these allowable uses. Ocean Fathoms countered that its operations should be viewed as “an extension of many other similar [p]rojects that have been allowed under the Coastal Act with respect to a commercial agricultural use (such as aquaculture).” Cal. Coastal Comm’n, supra, at 10. The staff did not agree, concluding “Wine is not an aquatic plant or animal and thus, the proposed project does not fit the definition of aquaculture.” Id.

The Coastal Commission was due to vote on the permit application earlier this month; however, Ocean Fathoms withdrew its permit application a week before the hearing. Jade Martinez-Pogue, Ocean Wine Storage Company Withdraws Coastal Commission Application for New Facility Off Montecito, Noozhawk (Aug. 17, 2021). Even if the plans are on hold in California, this may not be the end of the venture. The company’s co-founders have signaled that they may pursue the ocean winemaking process elsewhere. Dooley, supra. If the company eventually does set up shop again, the founders hope to sell the seafloor wine through an exclusive wine club that will sell bottles for $350 to $500 each. Id.