Europeans Crush “California Champagne”

January 28, 2008 by Jeremy Barretto

Its not often that a small country like Belgium would have the bravado to take on the world’s superpower. But earlier this year David literally crushed Goliath in a geographical indicators dispute between the old and new worlds.

It was reported on January 10, 2008 that 3,200 bottles of André sparkling wine from California were seized by officers at the port of Anvers, Belgium. André made the faux pas of advertising their product as “California Champagne” and “André Champagne Cellars” allegedly in violation of export laws that protect the name of wine regions. In a peculiar development, somewhat reminiscent of a modern day Boston Tea Party, Belgian and World Customs Organization officials released this video showing the destruction of the wine. Is this the start of a wine war between the old and new world?.

The André seizure is but one example from a broader movement to protect old world labels from Europe against new world threats from primarily North America, South America and Australia. The intent of the European custom officials is clear: mess with our brands and suffer the consequences. According to David Vaver, France has led Europeans countries in establishing worldwide protection for appellations (districts) of origin for gourmet wine and food to preserve the uniqueness of their products.

North America South America and Australia have less established regions and can gain consumers by using old world indicators. There are exceptions, such as the new wine region of New England Australia. Although this choice of name appears likely to confuse connoisseurs on three continents, it shows that Geographical Indicators (GI) can be of value outside of Europe. Australia has been a new world GI success story with wine regions Coonawarra and Barossa. In fact, Irene Calboli reported that Austrailian wines outsold French wines in Britain and America for the first time in 2003.

The international legal foundation for geographical indicators is found in the The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) administered by the World Trade Organization (WTO). Provisions 11.11 to 11.15 of the Federal Trademark Act R.S.C. 1985 incorporated geographical indicator standards from TRIPS into Canadian Law:

(a) identified a wine or spirit as originating in the territory of a WTO Member, or a region or locality of that territory, where a quality, reputation or other characteristic of the wine or spirit is essentially attributable to its geographical origin, and

Vaver sees some ambiguities with these provisions regarding what exactly would identify a geographical region. He cites Beaujolais as being readily identifiable with an appellation in France but not “Canadian Beaujolais” or “Fizzy Beaujolais.” Customay names such as Port and Sherry are exempted from these provisions. The hope of the Europeans is that countries like Canada will treat theses exemptions as temporary. Canadian producers may prefer a prolonged exemption, since having “imitation fortified style sherry” just isn’t as romantic.

Two distinct directions appear possible for the future of GIs. The old world position would advocate a strengthening of existing GIs for wine and also a broadening of protection to other products such as cheeses. Irene Calboli writes that this position is supported by the long history and investment in products with GI protection. Further, inadequate GI protection would confuse consumers and result in new products “free riding” on the reputation of the original territory of origin.

Conversely the new world position advocates against expanded GI protection. Calboli cites the weak link between now generic names and their territory of origin due to use of geographical terms by immigrants in new lands. It is argued that it would be costly and time consuming to alter customary product names to satisfy expanded GI protection.

Considering the relative advantages of these positions a minimalist approach to GI protection is advocated for three reasons. First this avoids further complexity in the TRIPS implementation and uncertainty for generic names that could be swallowed by expanding GI, such as Parmesan cheese. Second, developing countries, often silenced in the old world vs. new world debate, would benefit most from less restrictive GI protection in establishing their agricultural industries. Third a minimalist GI protection system focuses the consumer on quality of the product rather than simply its original place of origin. If European products are of superior quality or value then added protections are unnecessary, given that the territory of origin is prominently displayed. Expanding GI protection appears less akin to historical preservation and more like sour grapes.