Tequila's Denomination of Origin

The law that establishes all the specifications required to produce, bottle, distribute and sell tequila as a product of a specific geographic area within Mexico is called the Denomination of Origin. According to the "Appellation de Origin Controllee" (AOC), tequila can only be produced in Mexico, only in the areas of those states as indicated.

 

In the wine and spirits industry there are five drinks recognized with Denomination of Origin: sherry, cognac, champagne, mezcal and tequila.

 

In September, 1966, Mexico signed the Lisbon Agreement which states that all parties shall undertake to protect, on their territories and in accordance with the terms of the agreement, the appellations of origin of the products of other countries which are recognized and protected as such in the country of origin, and registered with the World Intellectual Property Organization (WIPO).

 

In 1973 Tequila Herradura and the Regional Chamber of the Tequila Industry applied for the declaration of protection for this appellation of origin from the Secretariat of Trade and Industrial Promotion. On December 9, 1974, a declaration of protection was published in the Official Federation Gazette. It stated that tequila could be applied only to the liquor of the same name. This was published in accordance with the Official Quality Standard (NOM) for tequila, which also and delimited the territory of origin. This first set of regulations governing where tequila could be made were amended in 1976 when the first NORMA was released. That NORMA also gave legal protection to the name tequila.

 

Tequila gained international recognition when the Mexican Government issued its Declaration for the Protection of the Appellation of Origin Tequila (also called the Denomination of Origin Tequila - DOT). Because of its geographical origin,, reputation and essential specific qualities, the government decreed that "tequila" was to be considered a geographical indication of Mexico. This prevented the word from being used as a generic name on other spirits not made under the controls of the Mexican government. 

 

The AOC, or Appellation de Origin Controllee was published on April 13, 1978 in the Registry of Appellations of Origin under the Lisbon Agreement created by the World Intellectual Property Organization (WIPO). Since then, every single bilateral and multilateral trade agreement that Mexico has entered into, including NAFTA, contains a clause granting exclusivity of the name Tequila to Mexico. However, it wasn't until 1996 that Mexico, as a member of the World Trade Organization (WTO), signed an international agreement for all countries to recognize tequila as a Denomination of Origin product from only a certain geographical area in Mexico.

 

The AOC - also called the Denomination of Origin Tequila (DOT) - is like a national intellectual property. Other nations agree to respect it and not allow anything to be made or sold in their countries that does not meet the DOT requirements.

 

DOT has been ratified by all the major international trade organizations and agreements, including NAFTA and the World Trade Organization. Mezcal, with its own Denomination of Origin, has similar protection.

 

Under NAFTA, it says,

"Canada and the United States shall recognize Tequila and Mezcal as distinctive products of Mexico. Accordingly, Canada and the United States shall not permit the sale of any product as Tequila or Mezcal, unless it has been manufactured in Mexico in accordance with the laws and regulations of Mexico governing the manufacture of Tequila and Mezcal."

 

Between 1986 and 1994, the WTO responded to increased pressures to address intellectual property rights in international trade. The result, ratified by all member states, was the Agreement on Trade-Related Aspects of Intellectual Property Rights, abbreviated TRIPS. This delineates provisions protecting copyrights, trademarks, patents, industrial designs, and the fledgling concept of geographical indications. According to Article 22 of TRIPS:

"Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographic origin."

 

As with other internationally famous foods and beverages such as Champagne, Scotch, or Roquefort cheese, Tequila can clearly lay claim to TRIPS protection.

 

In May, 1997 Mexico and the E.U. signed a bilateral trade agreement in which Europe recognized Tequila and Mezcal as "denominations of origin." In return, Mexico granted exclusive recognition to 175 European spirits, including Champagne, Cognac, Grappa and Scotch. At the time of the signing the Tequila Regulatory Council (CRT) estimated that some 3.5 million liters of "pseudo-tequilas" were sold annually in Europe under such names as "Blue Tarantula" in Italy, "Hot Tequila" in Finland, and "Silver Gunmen" in Belgium. Since then, Mexico has continued negotiating with the E.U. to improve its lax enforcement of the 1997 agreement.

 

As Sean Pager, Associate Professor of Law at the University of Seattle, wrote of the name issue,

 

When is tequila not tequila? Answer: when it’s produced in the United States. J.B. Wagoner learned this lesson the hard way when he began selling an alcoholic spirit distilled from the fermented juice of the blue agave plants grown on his 25-acre property in Temecula, California. Blue agave is the same cactus-like succulent from which tequila is made in Mexico, and Wagoner followed essentially the same distillation process as the Mexicans. However, tequila is a protected geographical indication (GI).1 Only blue agave spirits produced in Jalisco and a few neighboring counties in Mexico can be legally sold under that name.2 Because Wagoner’s blue agave was grown and distilled outside this designated region, he was legally barred from selling his product as “tequila.” 

 

Mexico's had another dispute, with China. China had not signed separate trade agreements with Mexico, a requirement for China's entry into the WTO because China has hesitated to accept tequila as a geographically indicated product. And there were concerns that China was setting up intellectual revisionist arguments to prop up their refusal. A headline in a Chinese newspaper read, "Archaeological studies show that China had developed mature tequila distilling technology in the late Yuan Dynasty or early Ming Dynasty." And in the People's Daily Online News, from September 29, 2006, a similar story had this about findings from a 3,000-year-old digging:

 

People found an unusual round object at the Qing Dynasty site; at first glance it looked something like a well. Eventually, archeologists concluded that it was used to produce tequila in China. Back then, a large 'tian guo' was supported on the pedestal, and it had two layers. Cold water was put in the upper layer and the yeast was put on the lower layer. When the yeast was steamed, the gas containing alcohol cooled to a liquid and flowed out from a pipe. This liquid was a form of tequila.

 

However, this may simply be an inappropriate translation of the original Chinese article and the word tequila should be replaced with a generic term like distilled spirits.

 

Tequila producers expressed concern that China could produce its own brand of pseudo-tequila, since it has a climate that could support the agave. Apparently there is already cheap, Chinese pseudo-tequila being produced in Sichuan. Mexican producers worried it could be exported to the lucrative US market, and hurt tequila's success there. Chinese companies could also produce spirits whose taste mimics tequila but does not use any agave sugars. This is what European imitators did.

 

Trade sources warned that China was not interested in having big international spirits companies dominating the domestic market after WTO, and that China would probably follow India's lead to keep the large multi-nationals out.

 

China joined the WTO in late, 2001. In early 2007, the US filed piracy charges against China under the WTO agreement. To date, tequila is still a very small market in China and as of June, 2007, tequila has not been threatened by any Chinese piracy.

 

 

 

Sources

• Tequila and International Law
• WTO on China's acceptance
• News on Tequila Aficionado
• Academia Mexicana del Tequila
• Do Copyists Have a Privilege to Make ‘Fair Use’ of ‘Semi-Generic’ Trademarks on Competing Goods?
• Managing Intellectual Property
• The Protection of Geographical Indications in Mexico (WIPO)
• Denominations of Origin and Rural Development: The Case of the Tequila Industry

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