The Australian wine industry position on Geographical Indications TONY BATTAGLENE DIRECTOR, INTERNATIONAL & REGULATORY AFFAIRS WINEMAKERS’ FEDERATION OF AUSTRALIA

Why the Australian industry has a GI protection system? Do they increase price or demand? Export market issues in terms of protecting our GIs Recent developments in Australia’s system of protection for GIs

Why does the Australian industry have a GI protection system?

The Agreement between Australia and the 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 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 its enforcement procedures

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

Geographical Indications within Australia have a 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

Towards a Geographic Indication System for Australia

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 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?

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

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