THE PROTECTION OF THE DESIGNATIONS FOR SPIRIT DRINKS

The proper use of regulations relating to excise duties includes not only a knowledge of the EU and national rules linked to them, but also of the Combined Nomenclature, to which Directive 92/83 on the harmonization of the structures of excise duties on alcohol and alcoholic beverages refers, since said legal text does not itself define the different products included in it.

At this respect, the Combined Nomenclature is a limited text, as it cannot be otherwise given its general nature, offering a brief description of the different spirit drinks and without enter in detail about the specific characteristics of each of them, which must be examined in the technical legislation, constituted by Regulation 2019/787.

Significantly, the last mentioned law not only stablishes legal requirements of each of the spirit drinks regulated in it, but also covers an area of ​​utmost importance: the protection of the designations of the products concerned.

The Combined Nomenclature and its interpretations, from an administrative and judicial point of view, have been repeatedly examined in depth, and therefore, perhaps, it may be of interest to make reference here to the crucial rules on the protection of the names of spirit drinks, considering, besides, its undoubted significance, since Regulation 2019/787 dedicates 21 of the 51 articles contained in it to this matter, that is to say, 41% of the total.  

This protection covers three different fields: what is being protected; what activities are defended against and how the protection is controlled:

As for what is being protected, the concept is twofold, because it refers not only to the particularities of a certain spirit drink, including the raw materials with which it is produced and the traditional method used for its production, but also to its origin: the name of a specific geographic area of ​​the country of production.

Regarding the irregular activities against which the protection acts, they are detailed in article 21 of Regulation 2019/787, and are related to both the name and the origin of the product:

a) any direct or indirect commercial use of a registered name for products not covered by the registration.

(b) any imitation or evocation, even if the true origin of the products or services is indicated or if the protected name is translated or accompanied by an expression such as ‘style’, ‘type’, ‘method’, ‘as produced in’, ‘imitation’, ‘flavour’, ‘like’ or similar.

(c) any other false or misleading indication as to the provenance, origin, nature or essential qualities of the product in the description, presentation or labelling of the product liable to convey a false impression as to the origin of the product.

(d) any other practice liable to mislead the consumer as to the true origin of the product.

Finally, with regard to the procedure of control, it is necessary to make a request for registration of the designation in the European Union, preferably by a group of producers from a concrete geographic area, petition which must be formally approved by the European Commission if there is not opposition by a third party, in which case a procedure is opened to determine whether said opposition has a legal fundament or not.

Occasionally, an alleged breach of the regulations with respect to a certain registered product has given rise to legal proceedings before the EU Court of Justice, as occurred, for example, in the case Scotch Whiskey Association v Michael Klotz, decided by said body in its ruling of June 7, 2018 (case C 44/17). 

The dispute arose, before the German Court that send the preliminary ruling to the Court of Justice, due to the marketing in Germany of a whiskey manufactured in this country (the origin was mentioned on the label) called “Glen Buchenbach”. The demand from the Scottish manufacturers' association was based, in essence, on the use of the term "Glen", which means "valley" in Scottish Gaelic and it is commonly used in Scotch whiskey brands, a term which could indirectly lead the consumer to associate the whiskey sold in Germany with one of Scottish origin.

 In fact, the lawsuit had an important basis, since the term "glen", adopted by many Scottish distilleries, is linked to the valleys of the country, rich in water -an essential component of whiskey- where said distilleries were installed (well-known brands with this word are Glenfiddich, Glenmorangie, Glendronach, Glenrothes, Glenfarclas…). 

In this regard, the Court of Justice did not directly resolve the conflict, but rather provided the German Court a “guide”, in accordance with the questions asked, which specified:

-That to the existence of an indirect commercial use of a protected name, it is necessary for the disputed indication to be identical or similar from a phonetic or visual point of view, totally or partially.

-That for the existence of an “evocation” of a protected name, it is necessary that the controversial indication leads to a well-informed, attentive and careful average European consumer to think about the protected name, and at this respect, the fact that the labelling does mention the true origin it is not relevant.       

In view of such a “guideline”, the Landgericht Hamburg (Regional Court of Hamburg) ruled, on February 7, 2019, that the disputed Swabian whiskey could not be called "Glen Buchenbach", since this name was an evocation of the protected Scottish designation of origin.

This ruling was appealed, and it was resolved in the same sense, on January 20, 2022, by the Hanseatische Oberlandesgericht (OLG), the Hanseatic Court of Hamburg.

To avoid this type of conflict, the European Union has concluded specific agreements with third countries in relation to the protection of spirit drinks, such as the one concluded with Mexico in 1997, on the mutual recognition and protection of designations for spirit drinks, whose article 4 states:

 “In the United Mexican States, the protected Community names:

— may not be used otherwise than under the conditions laid down in the laws and regulations of the Community, and

— are reserved exclusively to the spirits originating in the Community to which they apply.

In the Community, the protected Mexican names:

— may not be used otherwise than under the conditions laid down in the laws and regulations of the United Mexican States, and

— are reserved exclusively to the spirits originating in the United Mexican States to which they apply”.

Said Agreement was modified in 2020, to extend the protected designations, which include, for the EU, Armagnac, Calvados, Cassis, Grappa or Brandy de Jerez, and for Mexico, in addition to the classic products tequila and mezcal, others like sotol, charanda, bacanora and raicilla.  

We can also cite the Agreement of March 25, 1994, between the European Community and the United States of America, on the mutual recognition of certain distilled spirits/spirit drinks, whose parts “A” and “B” lay down:

“A. The USA agrees to restrict, within its regulatory framework (27 CFR 5.22 or an equivalent successor regulation), the use of the product designations: 'Scotch whisky', 'Irish whiskey'/Irish whisky', 'Cognac', 'Armagnac', 'Calvados' and 'Brandy de Jerez' to distilled spirits/spirit drinks products of the Member States of the EC, produced in compliance with Council Regulation (EEC) No 1576/89 and with the laws of the Member States in which those products originate. Further, it is recognized that these products shall continue to be subject to all of the labelling requirements of the USA.

B. The EC agrees to restrict, within its regulatory framework (Council Regulation (EEC) 1576/89, Article 11 or an equivalent successor regulation), the use of the product designations: Tennessee whisky'/'Tennessee whiskey', 'Bourbon whiskey'/'Bourbon whiskey' and 'Bourbon' as a designation for Bourbon whisk(e)y to distilled spirits/spirit drinks products of the USA produced in compliance with the laws and regulations of the USA (27 CFR 5.22 or an equivalent successor regulation). Further, it is recognized that these whiskies shall continue to be subject to all of the labelling requirements of the EC”.

Other important agreement on protection of spirit drinks was concluded with Canada on September 16, 2003, and modified by Decision of April 4, 2024 to update it in order to include the particular items of the CETA agreement of October 30, 2016.