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The Australian wine industry The Australian wine industry position on Geographical Indicationsposition on Geographical Indications

TONY BATTAGLENETONY BATTAGLENEDIRECTOR, INTERNATIONAL & REGULATORY AFFAIRSDIRECTOR, INTERNATIONAL & REGULATORY AFFAIRS

WINEMAKERS’ FEDERATION OF AUSTRALIAWINEMAKERS’ FEDERATION OF AUSTRALIA


Why the Australian industry has a GI Why the Australian industry has a GI protection system?protection system?

Do they increase price or demand?Do they increase price or demand?

Export market issues in terms of protecting Export market issues in terms of protecting our GIs our GIs

Recent developments in Australia’s system of Recent developments in Australia’s system of protection for GIsprotection for GIs


Why does the Australian Why does the Australian industry have a GI protection industry have a GI protection

system?system?


The Agreement between Australia and The Agreement between Australia and the European Union on Trade in Winethe European Union on Trade in Wine

• Entered into force on 1 March 1994• Australia agreed to provide protection for

European Union 'Geographical Indications' as they relate to wine, with certain sensitive semi-generic terms to be phased out at a later date.

• Europe also agreed to protect Australian Geographical indications.


Historical use of GIsHistorical use of GIs

• Prior to 1994, Australian wine was commonly sold with the brand name and a semi-generic style descriptor, such as Burgundy, Champagne or Moselle.


A GI system of protection is only as good as A GI system of protection is only as good as its enforcement proceduresits enforcement procedures


To give force to the wine agreement, To give force to the wine agreement, Australia Australia enacted legislation to create and protect enacted legislation to create and protect

Geographical indicationsGeographical indications

• The Australian Wine and Brandy Corporation 1980 (AWBC) Act was amended to do this.

• In addition, as Australia did not have or protect any domestic Geographical Indications, the Geographical Indications Committee (GIC) was also established by the same legislation. The GIC is responsible for determining the names and boundaries of Australian GIs and any conditions applicable to their use.


Australia also created a label integrity Program

• The label integrity program is a recording system to provide an audit trail from grape purchase to finished product, to substantiate label claims in respect of vintage, variety and geographical indication.

• The program was created by the Australian Wine and Brandy Corporation (AWBC) following a request by the Australian wine industry to establish a system which would ensure the integrity of Australian wine for both domestic and export markets.


LIP program introduced from 1990 vintageLIP program introduced from 1990 vintage

• Its objective is the advancement of the truthfulness and reputation for truthfulness of statements made on Australian wine labels, or made for commercial purposes in other ways, about the vintage, variety or geographical indication (region of origin) of all wines manufactured in Australia.


FUNDAMENTAL CONCEPTS OF LIPFUNDAMENTAL CONCEPTS OF LIP

• The program does not require a winemaker to make a label claim - that is, a claim as to the vintage, (grape) variety or geographical indication (region of origin of the grapes) of the wine.

• However, if a label claim is to be made, then an audit trail from finished product back to grape purchase must exist to substantiate any such claim.


Evolution of the Geographic Indication System for AustraliaThe Australian wine industry and the Australian Government debated at length whether to have a European style appellation system or a geographic indication system. The latter was decided on for many reasons, amongst which were:

Australia did not have the hundreds of years of experience in vine and viticulture practises that Europe had and from which evolved the AOC system.

New viticultural regions were emerging all the time in Australia, e.g. Wrattonbully, South Burnett, Lenswood, etc.

New viti- and vinicultural practices were being developed.

Most regions grew the same grape varieties as each other, thus a system based mainly on GEOGRAPHY and HISTORY was the only practical system available and it fitted in well with the Label Integrity Program.


Geographical Indications within Australia have a Geographical Indications within Australia have a hierarchical structure. hierarchical structure.

• The Geographical Indication ‘Australia’, incorporates the whole country.

• Underneath that are a number of zones, regions and sub-regions – each which have the status of a geographical indication within Australia.


Towards a Geographic Indication System for Australia

The GIC has declared and entered into the Register of Protected Names 103 regions and localities in Australia.

During this time, it became obvious that nowhere near all the 423 “temporary” GI’s listed in Annexure 2 of the Wine Agreement would qualify under the 1993 legislation. Those that do not qualify will be deleted from Annexure 2.

Comparison between “temporary” GI’s in 1992, approved GI’s in 2004 and the determination of all applications lodged:

1992 2004 Applications

States & Territories 8 8 8

Zones 31 28 28

Regions 169 56 63

Sub Regions 215 11 20

TOTALS 423 103 119


Towards a Geographic Indication System for Australia

Applications under consideration:

Regions:

King Valley Whitlands High Plateaux Pemberton Manjimup Wrattonbully Penola Robe

Sub-regions:

Belford Rothbury Pokolbin Mount View Whitlands Myrrhee Clarendon Finniss River Great Western

No new applications have been received since 1 January 2003.

Advice has been received that applications are being prepared for a small

number of emerging areas.


Recent developments in Australia’s system of

protection for GIs


Australia United States Free Trade Agreement (AUSFTA)

• Resulted in a number of changes to the system for protection of geographic indications in Australia.

• These changes were implemented by amendments to the Australian Wine and Brandy Corporation Act 1980 and through a new Regulation 17A which came into effect on 1 January 2005.

• The changes resulting from the UAUSFTA specifically permitted cancellation procedures for GIs and the ability for a trademark and GI to co-exist.


• Article 17.2 of the AUSFTA regulates the use of Geographical Indications, which are eligible for protection as trade marks

• Schedule 3 of the FTA Act implements this agreement by inserting in the AWBC Act a new Subdivision D that provides new procedures for objection by an owner of a trade mark (whether registered or unregistered) during the process of determination of a new GI, on the basis of that owner's pre-existing trade mark rights


Does the use of GIs increase price or sales?


1993 - Australian exports were 44 million litres valued at $144 million to the (now) European Union. This was half the total Australian wine exports.

2004 - Exports to the European Union are still around half the total (55% by volume and 46% by value). Total exports are around 665 million litres with a value of over A$2.74 billion ($2.0 billion).


A system of geographical indications, allowed Australian producers to label wine for export to Europe in a fashion that previously was restricted within Europe to quality wines PSR.

The ability to label wines with consumer friendly information including vintage and variety information gave Australian wines are marketing edge at a time when the majority of European wines were restricted in the information they were permitted to put on a label.


It was not the geographical indication that sold the wine, but the other information pertaining to vintage, variety and production methods as well as the ‘good story’ that is so common on Australian wines


Intellectual Property resides with the local area

Critical Mass

Brand v Geographical Indication

Label Usage

Promotion (development) of GIs

Tourism (wine & regional)

Regional Government

Local wine industry (Regional Associations)

Label Usage

Domestic v International recognition

System integrity

The Marketing and Promotion of Australian GIs


Export market issues in terms of protecting our GIs


The use of the Geographical Indication ‘Australia’ is limited in international trade:

• The United States prohibits use of a vintage date when used with a country name

• The European Union while allowing the use of country names as GIs in legislation, in practice will not give approval


• The key issues surrounding the protection of Australian GIs in export markets do not relate to the use of the smaller GIS, but to the use of the GI ‘Australia’.

• It is relatively common to see ‘Made in the Australian style’ or similar claims on foreign wine, but much rarer to see fraudulent claims relating to a smaller region.


• The most recognisable geographic indication from a marketing perspective is ‘Australia’.

• More value ascribed to this mark of origin


Conclusion

• The Australian experience is positive• Good domestic system to protect GIs• Few problems internationally – except for

restrictions on use of country name GI


Conclusion

• Regionality is important, particularly at higher price points

• Not the whole story• Only part of the ’story’ behind the brand• Not the solution to market share

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Documents

integrity of australian

australian wine labels

australian industry

wine agreement

boundaries of australian

enforcement procedures

gi protection system

gi system of protection