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The Case of Lafite vs. Lafitte and Krug vs. Krug

Posted: Monday, 17 February 2014 12:38

The Case of Lafite vs. Lafitte and Krug vs. Krug

Feb 17: For most Indians or Chinese, Lafitte might be considered a typo for Lafite; in fact even if you Google ‘Lafitte’ it throws 1.16 million entries at you, the majority relating to Lafite, but Château Lafitte is a small unclassified Bordeaux producer which has been in a legal wrangle with the First growth Chateau Lafite (Rothschild) for a decade over the wine label, just as the LVMH -owned Krug readies for a legal battle with the small namesake winery in Austria.

Château Lafite Rothschild, the first-growth Bordeaux owned by Domaines Barons de Rothschild, owns nine properties in France, Spain, Portugal and Chile. Its Lafite has created waves and euphoria for Lafite is unprecedented in China. The wines cost upward of $500 a bottle and can touch $2000 for rare vintages.

If Domaines Barons de Rothschild is the Goliath of Bordeaux, Chateau Lafitte has been the David of the Biblical legend in which David took on Goliath successfully. The 25,000-case producer has been in existence since 1763 when the vineyard was bought by one Raymond Lafitte, a Bordeaux wine merchant. In 1970 the estate was purchased by Juliet Mengin who worked on replenishing the vines. Owned now by Max Mengin and Juliet’s grandson Philip who run the 34 Acre estate, it exports 95% of the wine, especially and understandably to Asia. The wines retail for an average of $25.

Since 2005, the Goliath has been needling the David- Lafitte and was involved in a legal fight in an effort to block the latter from using a name it has borne for 255 years. It reached a compromise in 2011, but Lafite was disallowed to use the label Lafite alone without the word Rothschild. Therefore, technically, it can refer to itself only as Chateau Lafite Rothschild.

But it seems that the Rothschilds have now taken the label battle abroad, challenging the right of Lafitte to sell as Lafitte in China where Lafite is the most popular and most counterfeited wine. Understandably, Lafitte’s owner Philippe Mengin is not amused. After a decade of exhausting and costly legal proceedings, he is upset and asserts he is not going to give up. He says reportedly, ‘Several times we have been cornered, both financially and morally, and just when our business was picking up again, this umpteenth charge forces us to speak out. Just because we are less economically powerful does not mean that our rights should not be recognized!"

Chateau Lafite Rothschild has a point too. China is one country where the customers are quite gullible and have a blind faith on any label that looks like Lafite. One can pick up various ‘qualities’ of Lafite and an extra‘t’ in the spelling could be taken as just another version of the Real McCoy. It would be interesting to watch where the battle goes as China is an important market for both the producers.

Wines from the parent company Domaines Barons de Rothschild (DBR) are imported in India by Aspri Spirits and Wines. Of course, the Lafite is available only through négociants. There is no known importer for Lafitte although one cannot rule out a few cases being imported for sale to the naïve and gullible. There was a time when Chateau de Latour was quietly sold as Chateau Latour with a vague suggestion that it was a wine from the First growth at discounted prices. Similarly, Mouton-Cadet, the branded label of the First Growth Chateau Mouton Rothschild enjoyed the reputation as the respectable label for the ignoramuses even though it is a branded wine sold in volumes at competitive prices.

Krug vs. Krug

Click For Large ViewThe well-known Champagne House Krug owned by LVMH, has been after a small winery in the Thermenregion of Austria in a small village named Gumpoldskirchen 20 kms south of Vienna. Weingut Krug Gumpoldskirchen is small winery since 1746 with 34 acres of vineyards, in the village of Gumpoldskirchen, owned by Gustav Krug. It has been having a dialogue with the Austrian still wine producer since 2007, telling Gustav to desist from using the Krug label and registering the site as, thus supposedly creating confusion in the minds of the Champagne buyers.

Gustav Krug  produces 250,000 bottles a year with a range that spans Grüner Veltliner, Riesling, Zweigelt,  and even Rotgipfler, according to the Austrian Wine Marketing Board (AWMB). However, Krug reportedly discovered in 2013 that the Weingut had entered into sparkling wine production also. The website however does not indicate any sparkling wines. Gustav Krug is upset and wonders how he can be forced to change the website name which has been allotted to him on a first come first served basis.

Incidentally, Krug had registered the brand name in 1960 in Austria and in fact most parts of the world and actively enforces its trademark rights globally for any infringements. It contacted the Austrian Krug winery in 2007 and tried to come to an agreement so that there would be no confusion in the brand names.

Krug has not filed any lawsuits against Weingut Krug Gumpoldskirchen yet but it has indicated that since the negotiations have failed it would enforce its trademark rights thereby implying that the legal case is on the cards. However, both of them continue to engage in friendly discussion to avoid the legal collision.

Apparently, there are documents signed by Empress Maria Theresa in 1746 where she refers to Krug wines in the village of Gumpoldskirchen. This makes the Austrian producer nearly 100 years older than Champagne Krug which was founded in 1843 by Joseph (Johann) Krug, a German immigrant.

Veuve Clicquot takes on Prosecco Producer

Veuve Clicquot Ponsardin (VCP), another champagne producing constituent of the LVMH luxury group which owns labels like Moet et Chandon, Dom Perignon and the oldest champagne house Ruinart etc besides Krug, has apparently taken on an Italian winery for using a label very close to its famous Yellow Label.  According to reports appearing in Italy, the company has not yet sued Ciro Picariello, a winery in Campania but there is an issue about its Brut Contadino as it may confuse the consumers about the two bubblies, suggesting to the Italian producer that their label could evolve and create conflict.

The family-owned winery produces 3,500 bottles a year of its sparkling wine featuring an orange label.  Veuve Clicquot feels it could cause people to confuse between the two labels, causing damage to its brand.“The easily recognised Clicquot Yellow colour is trademarked in the EU, USA and Australia. According to reports, Veuve Clicquot approached Ciro Picariello at the end of 2013 to inform them of the similarity between the colours of their labels and requested a change in the colour to avoid any risk of association between the two products.”

However, the second-largest Champagne house, producing up to 18 million bottles per year with annual revenues of about $1.6 billion, insists It has not entered into a lawsuit against Ciro Picariello and continues to carry out an amicable dialogue.

The cases have a relevance to the Indian producers. Champagne Indage was obliged to change its name to Chateau Indage, Sula changed its name from Sula Champagne to Sula Brut, Zampa announced the label Zampagne when it debuted with a sparkling wine but wisdom prevailed and they decided on Zampa Brut. The producers will need to protect their trademarks within India and overseas as they go global.

Based on various Media Reports

Subhash Arora

Tags: Lafitte, Lafite, Krug, Château Lafite Rothschild, Krug, Veuve Clicquot Ponsardin


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