While French symbols including the fleur-de-lis and the Gallic rooster were featured prominently on the wine packaging, the designated origin on the back labels read ‘Made in Spain’ or ‘European Union wines’, often in a way that was hard for consumers to read.
Such were the examples of misleading wine labels cited in a French state consumer, competition and anti-fraud agency investigation into non-Geographical Indication (GIs) imported wines, published in 2018. Its findings have led the French government to contemplate a move to toughen legislation on misleading wine labels, as part of a consumer protection law concerning information transparency on agricultural and food products.
New legislation would include new wine labelling rules for wines sold by the glass and in carafes in hotels and restaurants and cafes, France’s Ministry of the Economy and Finances told the French Senate in February this year.
Letter of the law, but not spirit
As well as looking at cases of fraud, the investigation was aimed at protecting consumers to ensure that they were presented with clear information about wines, before choosing wine to buy.
These were not illegal wines in terms of wine content. Rather, the labels and packaging of these wines used language and label design in such a way as to mislead consumers over the country of origin of wines. The investigation revealed that there was insufficient visibility concerning the origins of wine on bag-in-box packaging, and on wine bottles.
Flexible rules in the Non-GI European Union wine category let any EU language to be used on wine labels, which has allowed producers to mislead consumers over the origin of wines. The front label of the Provetto Spumante sparkling wine made by Felix Solis, for instance, is written in Italian. It looks like an Italian wine. Its name is Italian. There is nothing illegal about the wine – but it’s made with grapes grown in Castilla La Mancha.
Consumers do not like it when they think they’re buying the product of one country, only to find it comes from somewhere else. German sparkling producers, for example, were able to import sparkling wine base from other countries, because their wines were classed as “industrial products”, and not originate products. But, as the 2006 research paper ‘The Country-of-Origin effect of Sparkling Wine’ by Professor Simone Muller (now Prof. Dr. Simone Loosen) recounts, German consumers felt “disappointed and misguided” when they learned the truth about where the wines came from. Omission of information on labels or packaging can also mislead consumers.
Then there are the cases of New Zealand brands that have filled their Sauvignon Blanc bottles with cheaper Australian grapes. It’s legal, but because the words “Wine of Australia” only appear in small letters on the back label, it can be misleading.
Design issues
Rather than deceiving consumers, wine producers and importers argue that, in some cases, the use of certain names informs consumers about the style of wines. The popularity of Zinfandel wines in Sweden, for example, means that Italian wines often carry the name Zinfandel, rather than by the Italian synonym Primitivo – even though the name Zinfandel is more usually associated with California.
Heartwood Organic Zinfandel, The Wanted Zin and The Big Zin imitate US designs and are labelled with English language names, but the wines are made in Italy.
“Californian Zinfandel is (in general) more fruit driven and has softer tannins compared to Italian Primitivo, which is often more rustic with a more marked tannin structure,” said one Swedish wine importer, who declined to be named. “The labels and cartons state Wine of Italy, and the appellation in Italy and these wines are sold on the Italian wine shelf only, never together with wines from the US, so we don’t believe that it is misleading. The intention has rather been the opposite; to give a hint of the style of this wine, so as not to disappoint consumers,” she says.
Wine importers and producers often make the same choice when using Syrah or Shiraz on labels. Sweden’s state alcohol sales monopoly, Systembolaget, says compliance with EU and national legislation on fair and non-misleading information practice is of “utmost importance,” to EU-based retailers who sell wine to consumers. Systembolaget says it uses text and flags, both in stores and online, to duly inform customers on the country of origin for each product.
Where misleading labels can be an issue are for online wine sales, where back labels, for instance, are usually not shown. Don Kavanagh, editor at wine search engine Wine-Searcher, says he has seen a notable rise in misleading wine labels over the past 15 years. It’s widely known that companies piggyback off the success of certain types of wines and wine regions, and will imitate or evoke the branding of other wines to sell their own wine, but he says many wine companies are treading a fine line between taking shortcuts to profitability, and adopting honest approaches in the labelling of wines. Wine-Searcher now uses spider-software and is reaching out directly to producers to help it ensure the accuracy of its data, including that of labels.
GI Protection – Evocation and Imitation
A study by the European Union Intellectual Property Office (EUIPO) in 2016 revealed the extent of EU-made wine infringements. The study ‘Infringements for Protected GI for Wine, Spirits, Agricultural Products and Foodstuffs in the EU’ shows how wine, of all the GI agricultural products, is impacted the most, as the value of GI wines is 2.7 times higher than the value of non-GI wines. Data from eight EU Member States showed how GI wine infringements had led to an annual loss of €2.3m ($2.68m). Misleading labels accounted for the majority of the registered GI wine infringements, the study said.
A number of recent high-profile cases involving GI products have ended up before the European Court of Justice, showing how they are now extending the scope of their legal protection to combat imitation and evocation.
A landmark European Court of Justice ruling in May 2019, on a dispute over cheese producers, which could equally apply to wines, argued that a registered name could also be evoked through the use of figurative signs, and not just through words on the label.
The judges ruled that the EU’s GI regulation now ensures that registered names must be protected against “any evocation”. “Any” meant that evocation was possible through the use of a figurative element or elements. For example, Queso manchego cheese from La Mancha is protected. A cheese from somewhere else that uses famous La Mancha imagery (such as a figure of Don Quixote), is misleading the consumer because it suggests it is the protected cheese.
According to the EUIPO, the question is whether such design elements will trigger the image of the protected designation in the consumer’s mind. Professor Gergely Szolonoki from University of Geisenheim’s Wine and Beverages department, whose research has shown how the sub-conscious affects wine buying decisions, points out that many consumers spend only a matter of seconds on making wine purchasing decisions. Many consumers, he says, do not analyse the written communication on the wine labels when looking to buy wine, hence the importance of the design of the label, and its influence on sales.
Regulation
The EC is actively ramping up protection of GIs and IPRs (International Property Rights), by placing them at the core of trade deal negotiations with third countries. The protection of GIs has taken centre stage at EU-Australia trade talks, including that of the thorny issue of the name Prosecco, which was used in Australia prior to Italy’s move to officially change the name of the sparkling wine’s grape variety to Glera.
Meanwhile, in the US, the Wine Origins Alliance (WOA) is calling for new regulations to prevent misleading labels. Deceptive labelling, which in some cases has involved exemptions to AVAs (American Viticulture Areas) rules, means the WOA wants tougher protection for AVAs. Resolutions in the US Senate show that acknowledgement of the importance of place in winemaking is growing, but labelling law requirements at Federal level are insufficient, the WOA says.
“Consumers deserve labels that accurately reflect where their wine comes from. When a wine region name is misused, it leads to consumer confusion, and the credibility of our industry as a whole is harmed,” says Jennifer Hall, director of the Wine Origins Alliance.
Historical legal battles such as Opus One vs. Shala One, and Treasury Wine Estates’ vs. Rush Rich and its copycat imitation labelling of its Penfold wines, indicate the prevalence of deceptive labels in China.
Amidst moves from Chinese authorities to crack down on counterfeit wines, Spanish wine company Familia Torres said in 2018 that brand imitation through misleading and deceptive labelling of legally imported wines was increasingly a trend in China. In the same year, Wine Australia indefinitely suspended the export licence for an Australian wine company, Dalefolds, after it was found to be selling three Penfolds lookalike wines in the country. It was the first case of license suspension after the wine trade organisation was empowered to protect Australian wine producers’ intellectual property rights in export markets.
On 20 April this year, TWE said that it had finally registered its Chinese Penfolds trademark name Ben Fu, after a 10-year legal dispute.
