The end of champagne as we know it?

Moët & Chandon, Dom Pérignon, Laurent-Perrier and other world-class producers of champagne can no longer use this term to label their products in Russia. The new law passed on 2 July 2021 has caused a considerable upheaval among champagne producers but also consumers. Our legal team has taken a closer look into this dynamics of using geographical indicators.

By

Jan Buza

Let us start by clarifying the concept of a geographical indicator which effectively serves a very similar function to that of a registered trademark. This form of an intellectual property protection ensures that a specific indicator can only be used on products originating from a given geographical region, thus providing valuable information for the end customer about the quality and nature of the product. 

France was one of the first countries to introduce a system designed to protect geographical indications - Appellation d’Origine Contrôlée (AOC) [1]. These developments in the intellectual property protection domain have quickly gained international support as part of the World Trade Organisation’s Agreement on Trade-Related Aspects of Intellectual Property Rights. Currently, over 120 countries recognise the legal protection for the geographical indicator “champagne”, referring to a specific region in France. In other words, regardless of the quality of the product or the production process, champagne can be only used on products originating from the region of Champagne in France [2].

Although champagne may represent one of the most renown examples of a geographical indicator, it is certainly not the only one. Other examples include Parma Ham, Aomori Cassis and Kobe Beef, just to name a few.

On Friday 2 July 2021, Vladimir Putin, the president of Russia, has passed into effect a new legislation that challenges this international agreement related to the generally accepted use of the geographical indicator of champagne. The Russian government has claimed ownership of “shampanskoye” (champagne), viewing it as a product solely from Russia. In turn, established producers of champagne can no longer label their products in Russia as “champagne” and are forced to use the more generic term “sparkling wine” instead [3].

This action has been met by a considerable upheaval on the market. The current shortage of premium French champagnes in Russia however seems to favour the local producers, such as Abrau-Durso, the valuation of which has undergone a rapid increase [3]. Despite the level of anger displayed by the representatives of the association of champagne producers in France, some of the most popular producers of champagne (e.g. Moët & Chandon) have already announced their willingness to comply with the new legislation and introduced plans to label own products exported to Russia as “sparkling wine”.

[1] The IP Law Blog (2012), available from: https://www.theiplawblog.com/2012/05/articles/trademark-law/where-is-my-champagne/

[2] Collard, C. and Sadler, L. (2018), “Champagne for the New Year - trademark or geographic indicator?”, available from: https://thetmca.com/champagne-for-the-new-year-trademark-or-geographic-indicator

[3] Reuters (2021), “French champagne industry group fumes over new Russian champagne law”, available from: https://www.reuters.com/world/europe/french-champagne-industry-group-fumes-over-new-russian-champagne-law-2021-07-05/

Jan Buza

Jan Buza

Product Mind

Helped scale portfolio firms for a VC fund

CEMS Prague

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