July 04: In what could be considered a kick-on-the-butt for European businesses or a bout of protectionism, Russian parliament passed on Friday a legislation that prohibits any sparkling wine including Champagne to be called a Champagne unless it is made in Russia, writes Subhash Arora who feels it is totally unjustified and would be the biggest talking point in the wine world during the next few days, with Moet Hennessey threatening to suspend supplies and a distinct possibility of the whole of Champagne region boycotting Russian market unless the legislation is rolled back
Russia adopted a legislation on Friday stipulating that the word "champagne" can only be applied to wine produced in Russia, while the world-famous bubbly from France's Champagne region in France must only be called "sparkling wine".
Moet Hennessy Russia has already informed the local partner that the supplies are being suspended under the new law which also says that the company would have to undergo new registration procedures, among other requirements. Leonid Rafailov, general director of AST, a top liquor distributor working with a number of brands including Moet Hennessy, said yesterday that his company had indeed received a letter notifying it of the suspension. "I confirm that such a letter exists, and it is justified," he reportedly told AFP.
While a few Russians have opined that if Moet does not supply, there are other alternative sources. They tend to forget that there would be a concerted action by The Comité Champagne (Comité Inter Professionnel du Vin de Champagne-CIVC)- the trade association that represents the interests of independent Champagne producers (Vignerons) and Champagne Houses and one of the most well- structured and disciplined organisations in the world, to ban any exports of Champagne unless a workable solution is found.
If Moet Hennessey stops the supplies, the whole of Champagne would be obliged to stop the supplies and unless there were a way of smuggling their bubbly, the champagne loving Russians would be devoid of their favourite drink. Indeed, neither Moet Hennessey nor The Comité Champagne are expected to buckle down under pressure. The Champagne region and in fact, all the French are fiercely protective of the term ‘champagne’; it may be produced in Champagne with specified grapes and processed under strict regulation by The Comité Champagne.
The Comité had won a long battle for the GI registered Trade Classification in the US but only after a few old producers were allowed under the Grandfather Clause to call their bubbly if they mentioned on their label as California Champagnes- for instance Korbel, André or Cooks… and this because they had been making champagne for over 150 years.
Moet Hennessy is a part of French luxury goods group LVMH and is known for brands such as Moet & Chandon, Veuve Clicquot, Krug and Dom Perignon. Earlier this year, it had bought 50% stake in Armand de Brignac, a brand owned by the rapper Jay-Z. Incidentally, the Cristal label owned by Louis Roederer and earlier popularised by Jay-Z had been the Champagne of the Russian Czars for decades.
Is Russia trying to show its muscles after China has been flexing them-as seen in the recent case of taxes of up to 218% on wine imports from Australia? Is it another form of protectionism that has been evident globally during the Covid time? Hard to tell but rest assured, this will be a hotly debated topic all over the world. Meanwhile. Russian champagne lovers are perhaps rushing to the nearest store to stock as much of their favourite bubbly as possible-since at the very least, a shortage ought to be expected in the short term. The next few weeks are going to be interesting.
As reported by AFP, a popular Russian singer says Russian lawmakers could now adopt similar legislation regulating the use of the name "Mercedes" and even place names. But surely, it is not a First April joke!
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