FINAL MINUTES MEETING OF THE ADVISORY GROUP SPIRIT DRINKS

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1 07/06/2011 FINAL MINUTES MEETING OF THE ADVISORY GROUP SPIRIT DRINKS 3 March 2011, 9:30-13:00 hrs European Commission Rue de la Loi 130, room L130B 1049 Brussels Chairman: Mr Bosco Torremocha Attendees: - Commission: Mmes Buttini (K.3), Mocanu (C.3) and Moliterno (C.3) Mr Zorrilla (C.3) - Stakeholders: Mmes Breuer (CIAA/CEPS), Bénech (CELCAA/CEPS), Corral (COPA-COGECA), Galant (ESG) and Sobral (CIAA/CEPS) Messrs Cagiano (CIAA/CEPS), Garcia (CIAA/CEPS), Soper (CIAA/CEPS), Torremocha (CIAA/CEPS) and Wiwala (CIAA/CEPS) 1. Elections of Vice Chair Mrs Marie Bénech (French Spirits Federation, FFS) was appointed vice-chair of the Advisory Group under the commerce constituency (CELCAA). 2. Adoption of the agenda and the report of the last meeting of the advisory group of , drafted by the Chairman. The minutes were adopted. The chairman asked the meeting to let him know their requests under any other business. He noted a point on current trade issues, namely in Russia, following which the agenda was adopted. 3. Compound terms: state of play The Commission representative reported that the issue was on the agenda of the Spirit Drinks Committee held on 22 February and informed that the Commission services had undertaken an analysis of the concrete problems and possible. Since Member States had different views about the provisions related to compound terms and the existing guidelines did not appear to solve these divergences, the establishment of implementing measures of the Commission on compound terms appeared as the most appropriate approach. Most Member States expressed their preference for this solution.. Rue Belliard 12, bte 5 B-1040 Bruxelles T F info@europeanspirits.org

2 The chair reiterated CEPS willingness to cooperate with the Commission services for the future implementing regulationthe Commission representative asked CEPS to outline its expectations in relation to a possible implementing regulation and to communicate its point of view as soon as possible. To CIAA/CEPS question about the scope of the implementing measures, the Commission representative answered that the main objective was to provide clarification on the current provisions and to ensure clear information for consumers. To the chair s question about the timeframe for the Commission to present its draft, the Commission representative answered that this was subject to the consensus amongst Member States and the industry. The chair gave assurances that CEPS would get back to the Commission services with general views about the content of the implementing regulation without going down into DETAILS. CIAA/CEPS referred to two different kinds of difficulties: the divergent reading of the compound terms provisions and the need for some provisions to be completed e.g. new definitions in Annex I of Regulation 110/2008. CIAA/CEPS stressed that the examples of the problems in the EU market show that the difficulties arose from the application of the guidelines by the national administrations. He therefore asked the Commission services to consider communicating to Member States that these should no longer be applied. He added that a definition for compound term was essential to ensure that the current concerns are solved by the future implementing regulation. The Commission representative pointed out that clarifying the reading of the provisions related to compound terms through an implementing regulation could solve the reported problems. 4. Geographical indications: update The Commission representative reported that the procedure for the registration of the GI Somerset Cider Brandy was still ongoing. As regards Újfehértói Meggypálinka (Hungary) et Pisco (Peru), the participants were informed that the inter-service consultation had been launched, following which the respective summaries would be translated and published in the EU Official Journal for the objection procedure. An objection period would be then established. (Note: now published at the EU OJ). The same procedure would be undertaken for Ron de Guatemala when the replies on a number of questions sent by the Commission services to the applicants were received. The Commission representative also informed on the application for the registration of the GI Russian vodka. The Commission representative reiterated that Member States were encouraged to have a pragmatic approach limiting the number of GI applications and submitting the technical files well ahead of the deadline of

3 CIAA/CEPS drew the attention of the Commission services to the ongoing infringement procedure against Hungary because of their legislation setting up an illegal zero rate for their Újfehértói Meggypálinka. The Commission representative took note, pointing out that the analysis of the application for the registration of that GI was only based on the requirements of Article 17 of and general compliance with Regulation No 110/2008. To CEPS question, The Commission representative answered that the application for the registration of the GI Russian vodka only referred to the Annex II category vodka (15) and not to flavoured vodka (31). CIAA/CEPS expressed its concerns about the scope of the GI Polish vodka, which currently appears under the category vodka in Annex III of Regulation No 110/2008 but it actually also covers flavoured vodka. The Commission representative was aware of the issue, already put forward by Poland and informed the group that consultations were ongoing. CIAA/CEPS stressed that the Russians unsuccessfully tried to protect Russian vodka as a trade mark in USA but failed. They also wanted to have EU protection of Russian vodka but did not have real GI system in Russia. CIAA/CEPS added that there is vodka based on ethyl alcohol produced in Russia but processed and bottled in EU (e.g. Latvia) and labelled as Russian vodka. These products are exported all around the world. However, to identify actual problems, it would be necessary to look at the technical file. They also expressed some concerns in relation to well established EU trademark that could appear in conflict with the GI Russian Vodka. The Commission representative reiterated that, according to EU rules, the GI registration can be denied if the applicant does not demonstrate that equivalent protection is given to the GI at the national level. The Commission representative also added that misleading practices are forbidden by the EU legislation, but there would be no risk for well-established and lawfully used EU brands in case of registration in the EU of the GI Russian vodka. - "E- Spirit Drinks" database and other applications DG AGRI reported that, following the obligation set up by articles 17.4 and 20 of Regulation No 110/2008, the GIs technical files should be made publicly available. The same is required for the wine GIs. The Commission has therefore created a web application for wine GIs which allows the Member States to transmit their technical files to Commission. This application would be active by the end of June It would be extended to spirit GIs in the future. An analysis on how the information would be better released and on which elements needs to be communicated is ongoing. CELCAA/CEPS reported that the French industry had being considering 80 GIs and that a selection for which technical files would be prepared was agreed. She informed the group that 2 or 3 applications would reach the Commission by the end of An objection procedure was set up at the French national level and her association (FFS) was fully involved through a validation process of all the technical files. CIAA/CEPS reported that the Italian industry had also undertaken the preparation of the respective technical files amongst which Grappa, Grappa del Veneto and, afterwards, the others regional grappa GIs. He stressed that the related technical files would be published in Italy before being submitted to the Commission. 3

4 CIAA/CEPS recalled that an alert system when documents were uploaded on e-spirit drinks was indispensable. He added that UK aimed at presenting two GI applications. Regarding the application for Scotch Whisky, he informed the group that the technical file was well advanced but reported that clarification was sought from the UK Customs and Agriculture Ministries about the management of the verification procedure for bulk. CIAA/CEPS reported that Poland would be presenting 3 technical files and discussions on two more were ongoing. Discussions amongst operators and customs authorities are ongoing and the submission of the GI application is expected next year. To CELCAA/CEPS question, the Commission representative clarified that separate applications could be presented by different Member States on a single GI (e.g. Ouzo ). However, the specifications should be the same and the submission undertaken jointly. The chair outlined that a number of technical files were being prepared in Spain. Brandy de Jerez, Pacharán and Ronmiel were submitted to the Ministry and discussions were ongoing. He added that Brandy del Penedés and Orujo de Galicia were likely to reach the Spanish authorities shortly. 5. Absinth: suggested definition for Annex II of Regulation 110/2008 CELCAA/CEPS indicated that CEPS was very close to a definition for absinth as a new spirit drink in Annex II, stressing that the concerns about a toxic substance in this product (thuyone) is no longer justified as its presence is strictly regulated in the EU and national legislation. DG AGRI clarified that the procedure to follow would be an official request from one or more Member States to introduce this category. CELCAA/CEPS replied that France was likely to do so in due course. 6. Croatia: update on acquis implementation for "Domaći Rum" and "Domaći Brandy" The Commission representative reminded the group that the Croat authorities had asked a 7- year transitional period for using the denominations "Domaći Rum" and "Domaći Brandy", none of which fulfilling the EU requirements. This request was withdrawn by the Croat Government and the producers concerned are considering two options: either to change the technologies and recipes for their products to legally use the rum and brandy names or to keep both but change the names of the products. The Commission representative also presented the state of play of the accession negotiations between the EU and Croatia concerning the protection of certain GI names for spirits and pointed out that that the final list of GIs to be included in the Accession Treaty is subject to the verification by the Commission services of the compliance of the specifications with the EU rules and the outcome of the objection procedure. The protection of these GIs will be granted on the date of accession and limited to a one-year transitional period in which Croatia has to submit the complete technical files. 4

5 CIAA/CEPS reiterated their concerns about the possibility of the Croat authorities to remove the illegal products from the market when the implementing date arrives. The Commission representative stressed that the Croat operators are fully aware of the situation and should use the time until the accession to get prepared. After that date, measures could be taken by the control authorities if compliance problems arose. 7. Single Market Act CIAA/CEPS reported that the SWA submitted comments to the Commission consultation on the Single Market Act regarding a number of areas of interest for the sector, namely on labeling and taxation issues. 8. AOB CIAA/CEPS thanked the Commission for the negotiations for free trade agreements, namely with India, drawing the attention to the fact that there is a regular problem faced by the spirits operators in Russia regarding the so-called activity licence. This licence needs to be renewed every year through an expensive and random procedure. Rejections are not motivated and no reimbursement is foreseen when it happens. He reported that a UK company, after two unjustified rejections, had already lost 1 million pounds. The Commission representative invited CEPS to provide relevant data which would be transmitted to the Commission services in charge of relations with Russia. Disclaimer "The opinions expressed in this report represent the point of view of the meeting participants from agriculturally related NGOs at community level. These opinions cannot, under any circumstances, be attributed to the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the here above information." 5

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