Significant step of geographical indication “Yamanashi” for Japan’s wine

Formation of wine producing concept and participation into the global framework of wine trade                      

February 2014                             Teiji Takahashi

1.    First designation as geographical indication for wine in Japan

On 16 July 2013, the National Tax Agency of the Ministry of Finance designated ”Yamanashi” as a geographical indication by the official note of the Agency. This designation was made in accordance with the standard on geographical indication for alcohol beverages (Agency’s note on 16 December 1994), on the application from the Yamanashi Wine Production Cooperative, which was submitted in April 2013. This standard was established as an internal legislation to apply the protection of GIs as agreed in the TRIPS agreement of 1994 (Agreement on Trade -Related Aspects of Intellectual Property Rights).   

The geographical indication is a concept that has been developed since more than 100 years ago in Europe, named as “appellation d’origine. For many years, Americans and others have taken opposite position against the protection of names as geographical indications, for a reason that it might be a substantial obstacle to the trade.

 However, in 1994, WTO member countries, around 130 countries, agreed to protect GIs as intellectual property right, in the framework of Uruguay Round. These rights are to be called as “GI”. Accordingly, France has been changing the term “AOC” to terms” AOP” or “IGP”, which are common names of GI for both wines and agricultural products in the EU.. 

The definition of geographical indication is described in the article 22 of the TRIPS agreement, as below.

“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 geographical origin.”

 However, the agreement does tell nothing about how to materialize the definition of GI. Therefore, rules or regulations are up to the internal legislation of each country. Accordingly, various legal schemes of GI are actually adopted in the world. For example, in the EU, a system composed of cahier des charges (conditions of production for each geographical indication and third party’s control are adopted, then the quality of GI products to be attributable to its origin is certified. This scheme is called as “sui-generis system” which is an independent intellectual property right of commercial marks. On the other hand, the USA applies the trade mark system to protect the GI for agricultural products, and continue to apply the AVA (American viticultural areas) system for wine. Under the AVA system, producers have a right to use the name of the area only when more than 85% of wine is derived from grapes grown in the area. In this reason, the EU does not seem to recognize American GI wines as GIs as defined by the TRIPS agreement.

In this situation, Japan has recently made clear the concept of wine production in Japan. At present, many people in the world are aware that Japan is now producing excellent wines, then, they are very attentive to how Japan would define the concept of GI wine and join the international market. The conditions of GI wine in Japan are similar to European ones and Japan certainly considers that GI’s intellectual property right is different from trade mark. Just after when I reported the first GI “Yamanashi to the AIDV (Association Internationale de droit de vin), I received reaction from members and the OIV (Organisation internationale de la vigne et du vin)   

2.         Substantiation of concept of wine making in Japan

(1)      Requirements of production

Cahier de charges (conditions of production) of the GI Yamanashi consist of the following standards.

Conditions adopted by the administrative procedure

Region and grapes

a) Boundary of grape growing region:  Within the territory of Yamanashi prefecture

b) Grapes to be used: 100 % of wine shall be derived from grapes harvested within the boundary of Yamanashi prefecture

c) Grape varieties to grow

Koshu

Vinifera 

Others:  Muscat Bailey A, Black Queen, Bailey Alicant A, Kai Noir, Kai Blanc, Saint Semillon, Delaware

Wine

a) Wine shall be fermented and bottled within the territory of Yamanashi prefecture.

b) Alcohol content shall be no less than 8.5% for dry wine, and no less than 4.5%  

c) Wine treated by chaptalisation shall not contain alcohol more than 14.5 %

d) Addition of alcohol shall be prohibited.

Conditions adopted by Yamanashi Wine Cooperative.

a) Quality of wine shall be assured by sensory test conducted by the Yamanashi Wine Cooperative.

b) Sugar content of grape juice shall be no less than 14.0 degrees for Koshu, 

no less than 18.0 degrees for vitis vinifera, and no less than 16.0 degrees for other varieties.

In case of unfavorable weather, reduction by 1 degree of the above limits shall be allowed.

c) The voluntary standard of labeling shall be applied to labeling of name/s of grape variety. ( Ex, In case that 75 % and more of wine is derived from a variety of grape, the name of this grape could be stated.)

d) Sensory test

i) Objective

The objective of the test is to maintain and improve the quality of GI wine, and to secure the confidence of consumers.

ii) Operator

The technical department of the Yamanashi Wine Cooperative conducts the sensory test.

The sensory test shall be performed by 5 or more inspectors designated by the department. iii) Application

Producers who intend to state “Yamanashi” on their wine shall submit an application form verifying the compliance of requirements to the Yamanashi Wine Cooperative.

iv) Prior examination   

Prior to the sensory test, the director of the technical department and others shall examine and confirm the application, analytical data and others. With regard to analytical data, specific gravity, alcohol content, extracted component, total acid, volatile acid, total sulfurous acid are examined, in view of whether they are appropriate.

The sensory test shall be conducted for the wine of which the result of the prior examination has been acceptable.

Conditions as above may receive some criticism that the maximum yield has not been included. However, the important thing is the fact that almost all wineries in Yamanashi district (around 80 wineries) have declared their intention of producing wine in accordance with these conditions. They have accepted that they could not use the name “Yamanashi”, if they do not follow the conditions, For example, in case of using a grape variety other than designated ones, using grapes grown in other district or using grapes whose alcohol content is under the standard level, they lose the right to use the name “Yamanashi”, even when their wines are produced in Yamanashi area.

This GI system is quite different from “Appellation d’origine” under the control of Nagano prefecture or Koshu city. Under these systems, producers are free to use the names of origin, “Nagano” or “Koshu” for the wines which are not designated as “Appellation Nagano d’origine” or “Appellation Koshu d’origine”, because these systems are not intellectual property right.

(2)    Character of GI Yamanashi

The structure of the system of GI Yamanashi is similar to AOC established in 1935. The article 21in the décret loi de 1935 describes as below.

Après avis des syndicats de défense intéressés, l’Institut national des appellations d’origine délimite les aires de production donnant droit à appellation et détermine les conditions de productions auxquelles doivent satisfaire les vins et eaux-de-vie de chacune des appellations d’origine

contrôlées. Ces conditions sont relative , notamment, à l’aire de production,aux cépages, aux rendements, au titre alcométrique volumique naturel minimum du vin, aux procédés de culture et de vinification ou de distilltation.

Ne pourront être vendus sous le nom de l’appellation contrôlée que les vins réunissant les conditions exigées pour leur production dans chacune de ces appellations contrôlées.

Article 21(Modifié, lois 84.1008 du 16 novembre 1984)

Mr.Joseph Capus, promoter of the creation of AOC system and representative from Girond, says that in France, it took approximately 30 years to reach the consensus on this idea of wine production. It might be very tough task for wine industry of Yamanashi which is composed of small and medium size wineries as well as large wineries. The basic idea of such wine production consists of developing the property of the region by efforts on the basis of achieving a good harmonization of the natural power of the region and producer’s intention.

In the cahier des charges, the maximum yield of grapes is not introduced. It is not possible to establish it in the present situation where there is not common understanding on which level is appropriate , and it is not realistic to introduce too sever standard to the sugar content of grapes. Grape “Delaware”, which is prohibited to use in Europe is permitted. It is one of characteristics of Yamanashi. It does not seem to be necessary or appropriate to totally correspond to the European criteria, in view of giving characters attributable to Yamanashi region in Japan.

The first GI Yamanashi is a mean to materialize the concept of wine production under the legal framework.  Accordingly, it has a significant step in the history of wine production in Japan.

3.       High level of protection provided by the TRIPS agreement

GI Yamanashi is an intellectual property right which is recognized by the TRIPS agreement. The protection provided by the agreement is based on protection which has been elaborated in the history in Europe, in particular, in France. Therefore, the level of protection is high, and almost the same as AOC in France.

For example, the use of any means in the designation of wine that indicates or suggests that the wine originates in “Yamanashi”, for wine not originating in “Yamanashi” is prohibited, and the term “Yamanashi” itself is protected (article 22, TRIPS agreement). In the trade mark system Yamanashi itself is not protected, therefore,” Yamanashi” could be used in a manner which does not mislead the public as to the geographical origin. In addition, use of “Yamanashi” is prohibited for wines not originating in Yamanashi, even where “Yamanashi” is used in translation, or accompanied by expressions such as “kind”, “type”, “style”, “imitation” or the like (article 23, TRIPS agreement).  

The latter protection, that is applied even if it does not mislead the public as to the geographical origin, is called “additional protection (or higher protection)” only for wines and spirits. This additional protection was agreed in the TRIPS agreement by the strong request from the EU. For example, the use of “Yamanashi style” is prohibited.

For many years in the past, “Bordeaux (claret)” or “Bordeaux style” has been used widely in the USA, Australia or other countries. Then, the name “Bordeaux” has been considered as generic term in these countries. Moreover, wines with names of European names, such as Bordeaux, Burgundy have been classified as “Generic wine”, which is regarded as ordinary wine (table wine), compared to “varietal wine” in these countries. “Chablis” once has become generic term in some countries. The Europe has eagerly tried and is trying to prevent such trends and to claw back.  “Domaine Yamanashi” or “Chateaux Yamanashi” may be in question. It is a problem if a producer not having the right to use GI Yamanashi could use such names or not. In France, Château Margot” is registered as trade mark. It has the right to use GI “Margot”

Regarding relations with the trade mark, the Trade Mark Act in Japan prohibits the registration of trade mark for wines with a name (including similar name) that has been previously registered as GI, if the wine in question is not originating in the region of the GI (article 4, Trade Mark Act). This prohibition is declared in the TRIPS agreement. In addition, the Agreement stipulates that the trade mark which does not indicate the true geographical origin could be invalidated at the request of an interested party.  This regulation is declared in the TRIPS agreement (article 23 and article 24). So, the registration of trade mark indicating “Yamanashi” for wine will be refused, and the trade mark indicating “Yamanashi” of which real origin is not “Yamanashi” could be invalidated.

The law is necessary in principle for the adjustment of rights of use of names. In Japan the official note of the National Tax Agency does not work sufficiently for this purpose. Accordingly, uses of names related to Yamanashi should be accommodated by consultations among stakeholders according to particular cases...

This high level protection of” Yamanashi” has not yet been very much appreciated, since this name is not used so widely. However, the protection will be more appreciated, as the name receives higher reputation. The designation of “GI Yamanashi” will effectively prevent the use of the name in overseas market, when it becomes more popular in both Japan and foreign countries.

 The name of Yamanashi has been given the high level of protection by the international agreement. Then, it would be our important task to effectively protect this name both in Japan and overseas. “Koshu” or “Kai” is possibly synonym of “Yamanashi”. There would be a possibility to protect the name of “Koshu”.

“Wagu”(Japan’s beef), is now widely used in overseas, and some trademarks related to“Wagu” were registered in foreign countries, because of inexistence of intellectual property right for “Wagu” even in Japan.

4.       Pioneering role to receive recognition of Japan’s wine in the world market

GI Yamanashi was given a possibility to be qualified as high quality wine. In Europe there is a quite clear distinction in the regulation of labeling between GI wines as quality wine and other wines as ordinary wine. This distinction is applied in principle to foreign wines to be exported to the EU market. Indication of regional origin is not allowed to foreign wines other than GI wines by the EU wine regulations.

In, addition, some expressions related to technological methods, such as “ fermentation in wood container”, “Maturation in wood container”, that are allowed to label only for GI wines in the EU, are prohibited to foreign wines other than GI wines. Many European traditional terms, such as “Grand cru”, “Cru”, “Chateau”,” Sur lie” “Vendange tardive”, are also prohibited to label in principle for foreign wines. However, some derogations of these regulations are agreed in bilateral agreements on the trade of wine with exporting countries.

A ground that “Yamanashi” is to be classified as GI wine has been given by the designation. If Japan receives a confirmation of the EU, we can expect that these expressions, except traditional terms, are able to label on Yamanashi wines to be exported to the EU market. Exceptional use of some traditional terms could be negotiated with the EU.

In Yamanashi prefecture Japan , good smaller districts have been recently identified, in particular for Kosher wine, such as “Hishiyama”, “Isehara”.” Toriibira” Then these districts’ names are labeled. Traditional wine producing districts “such as Katsunuma” as well as newly developed districts such as “Akeno” are also labeled in Japan. The designation of GI Yamanashi will allow to label these names of smaller units of regions to GI”Yamanashi” wines to be exported to the EU market, because the article 67 of the EU wine regulation of 2009 allows the use of names of smaller regions than GI regions, in condition that more than 85% of the wine is derived from these units of area

Regarding the labeling of wine grape varieties, the EU wine regulation of 2009 ( article 62) states that for wines originating in foreign countries, the conditions of use of the names of the wine grape varieties shall conform with the rules applicable to wine producers in this country, including those emanating from representative professional organizations and the names of the wine grape varieties are mentioned in at least one of the following lists:

(i) the International Organisation of Vine and Wine (OIV);

(ii) the Union for the Protection of Plant Varieties (UPOV);

(iii) the International Board for Plant Genetic Resources (IBPGR).

Due to this regulation, Koshu wine could not mention “Koshu” as grape variety on wines to be exported to the EU at the first stage of export. However, in 2010 the Koshu variety has been registered in the OIV list. The registration of Muscat Bailey A (Japanese hybrid variety that is widely grown in Japan, due to its characters resistant to diseases and tolerant to high humidity) was made in 2013. Accordingly, “Koshu” and “Muscat Bailey A” could be now labeled in European market.

Regarding restrictions of labeling to be applied to foreign wines, problems were gradually solved by negotiations and consultations that have been conducted between the EC and exporting countries for many years. Therefore, Japan would need intensive consultations with the EU authorities, aimed at concluding better and well balanced solutions on labeling regulations.

The most important issue is that GI Yamanashi is to be recognized by the EU as the “GI” in the meaning of the TRIPS agreement or “Third country’s GI” in the meaning of the EU wine regulations. According to the past negotiations between the EU and the USA, it is presumed that the EU has not yet recognized American wines under the AVA system as GI defined in the TRIPS agreement. At the moment, the EU classifies foreign countries’ wines with names of origin as table below.    

Classification of wines with names of regional origin by EU

 

 

Geographical

Indication

Name of origin

PGI

PDO

USA

 X

  O

AVA system

 X

“Napa valley”

Registered in the EU system

Australia

 O

Australian GI system

  X

 X

  X

Canada

 O

GI in the trade mark system

  X

 X

  X

South Africa

 O

  X

 X

     X

Brazil

 X

  X

 X

Vale dos Vinhedos

Registered in the EU system

Chile

 O

  X

 X

  X

Switzerland

 O

  X

 X

  X

Georgia

 O

  X

 X

  X

 Source: EUCommission E-Bacchus  

The Europe seems to have appreciated Japan’s GI system for wine, due to its similarity to the European one, when they were informed of the designation of GI Yamanashi. Accordingly, the GI Yamanashi would be probably recognized as GI as defined in the TRIPS agreement and in the meaning of the EU wine regulations. However, we need to confirm it with the EU authorities.

The case of EU and Korea free trade agreement of 1999 suggests that there will be consultations of each GI system and of registration of GI names to be protected in each market in the ongoing negotiations on the free trade agreement between Japan and the EU. For example, in the EU, Korea free trade agreement registered GI names of products in each party as the following table. In the agreement between Japan and the EU the GI Yamanashi should be registered in the list of GIs to be protected.

As explained above, the GI Yamanashi should achieve a pioneering role, so as that Japan’s GI wines are qualified as quality wine in the international market of wine.

Number of GIs registered in the EU and Korea free trade agreement

 

Agricultural products and food

Wine

Spirits

Total

GIs of Korea

  63

 0

 1

  64

GIs of EU

    60

 80

 22

 162

 SourceANNEXE 10-A and 10-B in the EU and Korea free trade agreement

5. Challenges for coming years

We are now identifying the concept of wine production in the course of improving the quality of Japan’s wine since 50 years. That is the wine making based on regions. As above, we have recognized that the originality of wine must be attributed to the environment of grape growing regions.This concept is similar to the European geographical indication. In Japan, there have been a culture of enjoying reginal characters of food.and meal. Japan hasalso adopted the notion that grape variety is important to distinguish the charcter of wine.
Then, the grape name are mentioned along with the name of geographical origin in many wines in Japan, such as „Kikyogahara“ merlot, „Hokushin Chardonnay“. This type of labelling is popular for wines that are made with meticulous care.  

As the quality of Japan’s wine has been improved, the wine regions have been graduallyformed. These are “Kikyogahara”, “East Nagano”, “North Nagano” . As well as Yamagata,Hokkaido and some regions of west of Japan are becoming wine regions. These regions could be qualified as GIs in the near future. Taking the opportunity of the designation of GI “Yamanashi”, possible regions are expected to be designated as GI in Japan.

At the moment, many types of indication of origin for wine are observed in Japan, including “Nagano Appellation d’Origine”, “Koshu City Appellation d’Origine that are not intellectual property rights. The common system of all over Japan is preferable, in view of clear recognition of GIs by consumers and in overseas. In the global environment of sever competition of wine trade including the reduction or elimination of imported duties for wine products in international negotiations such as TPP and free trade agreement between Japan and the EU,

Japan has to focus on producing the high quality wine for both Japanese and overseas market,instead of ordinary wine that is much less competitive for Japan. In this sense, uniform and progressed GI system of Japan is important for the future of Japan’s wine.

 Japan’s wine that is produced by grapes grown in Japan could not fully meet the demand of consumers in Japan. The wine produced by imported grape juice (condensed and frozen) is also important, that is produced of imported grape juice, in using Japanese technology. It is also necessary that consumers could enjoy variety of foreign wines imported.  The share of Japan’s wine is only about 10% in the Japanese market as shown in the table below. A well balanced consumption of these three types of wines should be pursued by increasing Japan‘s wine to some extent. The designation of GI “Yamanashi” will contribute to the development of Japan’s wine.

                  Wine production and consumption in Japan 2008

 

Volume of wine

Type of wine

Share

Types of producers

Domestically

Produced wine

 

Wine produced by Japanese grapes

250 KHL  (150 KHL produced by grapes grown by famers)

Quality wine

Medium wine

10.1%

large, medium and small size wineries

Wine produced by imported juice

580 KHL

Table wine

23.6

Mainly large wineries

Imported wine

 

1,630 KHL

Table wine

Quality wine

66.3

large, medium and small size importers

Total

2,460 KHL

 

100.0

 

   Source: Ministry of finance, Ministry of agriculture, forestry and fisheries, Estimation of wine industry

Teiji Takahashi

Lecturer, Graduate school of agricultural and life sciences, Tokyo University
Board  member of the International Association of Lawyers of Wine
Doctor in law, University of Toulouse I