'The GI Prosecco Battle between Italy and Australia: Some Lessons from the History and Geography of the Most Famous Italian Wine' by Enrico Bonadio and Magali Contardi in (2022) 23(2) Journal of World Trade and Investment 260-292 comments
This article seeks to contribute to the debate around the legality of the Prosecco geographical indication (GI). The article’s main point is to demonstrate that the term Prosecco does satisfy the conditions laid down in Article 22 TRIPS, and that its protection as a GI in both the EU and other countries does not run counter to TRIPS. Through a review of the relevant literature, the article shows that this term has been used for many centuries in the North-eastern part of the Italian peninsula to refer to a high-quality wine, including in the territory around the village of Prosecco in the Friuli Venezia Giulia region of Italy. This suggests a strong link between that area and the quality and reputation of the famous Italian sparkling wine; and strengthens the EU and Italy’s claims for the protection of the term Prosecco as GI, in both the EU and other countries that sign trade agreements with the EU.
The European Union (EU), and Italy specifically, strongly protect geographical names in connection with food and agricultural products, especially those which have qualities linked to the soil and local areas and are made according to specific methods of production. The EU’s regime for the protection of geographical indications (GIs) aims at safeguarding both cultural and gastronomic heritage and economic values associated to the place of production (e.g. “Bordeaux”, “Rioja”, “Barolo” and “Champagne” wines). Protecting GIs via the sui generis system of Protected Designations of Origin (PDOs) or Protected Geographical Indications (PGIs) is at the heart of Europe’s agricultural and food policy.
Other countries, particularly in the so-called New World (i.e. the former colonies of European countries), do not offer geographical names the same strong protection as the EU does. United States (US), Canada and other states for example do protect geographical signs, but they do so via trademark law based on the “first come first served” rule. This however may create conflicts between European producers of wine and foodstuffs and local competitors in the new world. Chile, for instance, did not adopted a comprehensive law on geographical indications until 2005 - and several Chilean producers of wine in the past used European GIs. One of these was Champagne. Chile claimed that this term had been used locally as both a generic term and component of registered trademarks, dating back to the 1930s. From a European perspective, this is perceived as an unfair behaviour which aims to free ride on the reputation of European food and agricultural products’ brands and heritage, and may end up confusing consumers as to the real geographical provenance of the goods. The specific Chilean case was settled in 2002 when Chile and the EU signed a free trade agreement which provided for 12 years of coexistence after which all trademarks including the expression “champagne” would be cancelled and any generic use of the term would cease. This period ended in 2015.
As we have just seen, one of the arguments put forward by countries in the New World is that many of these terms do not identify anything but just describe the product itself; and that therefore the attempt by the EU to claw-back names which have become common in those states constitutes a protectionist measure aimed at monopolising descriptive terms and signs to the detriment of competition and consumers. This is thus a fight between the New World which embraces a minimalist approach to protecting geographical names, and the Old World, especially Europe, which advocates for a strong protection - not only at home, but also in other states via bilateral trade or economic partnership agreements. Indeed, the EU has constantly sought enhancing protection for its geographical names by shifting away from the WTO arena (where the two decades long discussion over reforming the TRIPS regime of GIs has been fruitless) toward a variety of bilateral accords that range from standalone agreements on GIs to sectorial accords that provide for mutual recognition and protection of names for wines or spirits. Specifically, the EU has in the latest years concluded comprehensive agreements with other nations that include a chapter on GIs, including the Japan-EU Economic Partnership Agreement, as well as the accords with Korea and Canada (CETA).
This expansionist strategy has, as expected, created tensions with some countries in the New World. The very early negotiations between the US and the EU for concluding the Transatlantic Trade and Investment Partnership (TTIP) failed also because of the opposition of US producers of wines and food (especially cheeses) which could not accept the EU claw-back demands. Emblematic and eloquent was the letter sent by fifty-five US senators to the US Trade Representative in 2014, expressing their dislike of the EU requests: “we urge you to make clear to the EU counterparts that the US will reject any proposal in the TTIP negotiations now underway that would restrict in any way the ability of US producers to use common names (e.g. for cheeses)”.
A GI dispute which may potentially see the EU being dragged before a WTO panel focuses on the use of the term Prosecco by Australian producers of sparkling wines. The name Prosecco has been formally protected since 2009 as GI in the EU,16 with protection under Italian law dating back to 1969. And the EU not only bans the importation of any Prosecco labelled wine in the EU - it also seeks a strong protection of this GI at international level via bilateral accords, including the trade agreement which is currently being negotiated between the EU and Australia. Of course, this demand is strongly opposed by Australia, which has recently experienced a hike in the sale of domestically manufactured Prosecco-branded sparkling wines. From an Italian and EU perspective, the reason for this opposition is clear: the Prosecco brand is powerful and attracts a strong customer base.
Such a row between the EU/Italy and Australia has been recently covered by some academic works. Specifically, it has been argued that the expression Prosecco has not traditionally been used or recognised as a term referring to a geographical location but just to a grape variety; and that the Italian Prosecco has historically been produced in the area surrounding the town of Conegliano in the Veneto region, at some 130 km from the village of Prosecco, which is situated in the neighbouring Friuli Venezia Giulia region. Therefore – the argument goes – the Prosecco GI status would amount to a “legal fiction” which ends up shielding Italian Prosecco producers from international competition. Based on this claim, the EU and Italy would violate several provisions of the WTO TRIPS and TBT Agreements if Australian producers were prevented from labelling their products with the term Prosecco.
Our article seeks to contribute to this debate and offer a different perspective. Its main point is to bring into the discussion history and centuries-old practices which confirm that the term Prosecco has been used for many centuries in the North-eastern part of the Italian peninsula, including in the territory around the village of Prosecco, close to the town of Trieste. That history and those practices suggest a strong link between this area and the quality and reputation of the famous Italian sparkling wine. This – we believe – strengthens the EU and Italy’s claims for the protection of the term Prosecco as GI, in both the EU and other countries which sign trade agreements with the EU. Most issues dealt with, and points made, in this article could also be relevant in other controversies which involve the Prosecco GI, including the recent challenge brought by Italy against Croatia’s application to register the traditional expression “Prošek” as EU PDO. .
