EBRD/FAO Cooperation. Macedonia: Technical Assistance to the Wine Sector

Transcription

1 EBRD/FAO Cooperation Macedonia: Technical Assistance to the Wine Sector WORKSHOPS on DEVELOPING GEOGRAPHICAL INDICATIONS (GIs) in MACEDONIA S WINE SECTOR SUMMARY REPORT Workshop 1 held at the Office of the European Union in Skopje on 13 March 2012 Frédéric JULIA International Wine Expert, FAO Representative Goran DAMOVSKI Local FAO Representative Elena MILOSHEVKA Representative of Wines of Macedonia Vlado BOJADZIEVSKI EBRD Representative Workshop 2 held at Skovin winery, Skopje on 14 March 2012 Coordinated by Frédéric Julia and Goran Damovski Participants: see list of producers, Ministry of Agriculture, Agriculture Inspectorate and Wine Institute representatives attached. Introduction The workshops were organized on 13 and 14 March 2012 in Skopje by the FAO Investment Centre. The general purpose was to continue the project under the FAO/EBRD cooperation aimed at assisting local wine makers to develop Geographical Indications (GIs). More specifically, the objective of the workshop was to elaborate the documentation for establishing the right to register the GI and the delimitation of the area, to provide elaboration of the code of practice for the proposed Vardar River Valley GI, and to discuss setting up the local rules and control mechanisms required.

2 Summary of Day 1 Session The workshop was organized with representatives from wineries and grape producers. It was structured in two main sessions: 1. Presentation on key fundamentals of GI implementation and elaboration of documentation for establishing the right to register a GI and delimitation of area; 2. Discussion session aimed at analyzing the Macedonian wine sector s effort to develop a draft position paper for the GI Vardar River Valley", addressing the document s insufficiencies, and gaining guidance for appropriate document finalization as well as establishment of a Code of Practice (CoP) and proper control system. At the beginning of the workshop a representative from the Wines of Macedonia Association that participated at the Study Tour in Côtes du Rhône gave brief presentation on key findings and lessons learned from the Study Tour in France, highlighting elements that can be applicable for Macedonia. Representatives from the wineries confirmed that the region visited in France has similar characteristics to Macedonia. At the same time, they noted that although the system for the registration of GIs has existed since 1936 and has been developed over time, it is still rather complex. It also assumes very structured coordination among members and is based on an excellent balance between their contributions and the benefits they gain from the reputation and recognition of the GIs. During the opening discussion, the wineries tried to analyze some of the main challenges they will face in developing the GI. Namely, the key difference with wine regions in France is that wineries in Macedonia are still purchasing significant quantities of their grapes as raw materials from small farmers and this makes control over the supply chain very difficult. It was suggested for wineries to identify ways to strengthen contractual relations with their bigger and most reliable farmers/suppliers so they can have full traceability and guarantee adoption of the established CoP. Nevertheless, it was stated that Macedonian wineries have to start with defining the first GI, Vardar River Valley, which is inclusive for many wineries; and even if insufficiencies are identified, a GI can evolve and be modified through time. This way a large number of producers can benefit but also contribute to financing the promotion of the GI. Frédéric Julia, an International Wine Expert, agreed that France has a very complex system but noted that Macedonian should not just copy-paste it. This is an opportunity for producers to learn from both systems (in France and potentially in a future study tour to Italy), then make adjustments, adapt to the local situation and create a framework that will suit domestic conditions. Elaboration of the documentation for establishing the right to register a GI and the delimitation of the area - Frédéric Julia, International Wine Expert Frédéric Julia started his presentation with reminders about implementing a GI system and the differences between a GI and a trademark. He emphasized the need, if Vardar River Valley is to be registered as a GI, to present unique and inimitable qualities, proof and preservation of a real connection with a geographic area, and common rules and penalties that should be 2

3 established to ensure that the behavior of each owner will not damage the overall reputation of the relevant term. - In theory, GI is a claim to uniqueness where characteristics of the soil combined with human factors can produce a product of distinctive, exceptional quality. Hence, the Vardar River Valley GI should demonstrate such uniqueness and inimitable wine quality so that any use of the term out of delimited border would be inappropriate. Frédéric Julia emphasized that one of the prerequisites before going any further in building Vardar River Valley as a GI is to solve the potential conflict with the already registered trademark Vardar Valley Winery. - Implementation of a successful GI system is based on sharing a common approach and common rules, which is in contrast with the creation of a private brand. Macedonian wine producers should continue pursuing their common vision and strategy for promotion of their products and develop common rules for a Vardar River Valley GI by imposing higher internal controls to ensure that GI claimants do not jeopardize its reputation. - Geographic connotation on its own does not guarantee consistency of the product. The developed GI system should enforce product standards including detailed product description that guarantees consistency which on the other hand secures prerequisites for high quality. - In practice, the risk of copying the product always exists. Most products originating from a certain area can easily be copied and produced in a different place. Geographic features are truly unique, but production techniques can be imitated. Therefore the GI registration system requires: proof and preservation of real connection with the geographic area, observance of product standards, regulations and specifications. The rules for use of the GI Vardar River Valley (and of other potential PGIs and PDOs from this area) should be carefully developed. - It should also be noted that establishing a GI will be linked with setting up production methods and standards. This means that the GI will restrict innovation both at the level of production and at the level of experimentation. It is then highly recommended to base the CoP not only on historical practices but also to encompass possible flexibility to adapt to modern technology and new taste. For this project implementation, Frédéric Julia suggested to the Macedonian wine producers to form three Task Forces, each of them being in charge of implementing one specific step under one umbrella GI Coordination Working Group composed of representatives of all the interested parties, which would be in charge of establishing and supervising the guidelines: - Task Force for Elaborating the Code of Practice - Task Force for Formalization of the GI Association - Task Force for Promotion, communication, identification of markets, defense against fraud, etc. 3

4 GI Coordination Working Group should be established encompassing local wine producers and grape growers to provide coordination among all participants. The GI establishment process will progress by setting a timeframe for meetings and discussions with all the stakeholders involved in wine production and by exploring possibilities for identifying partners, methodologies, findings, etc. The GI Coordination Working Group will manage the three Task Forces: (i) one with technical expertise for CoP defining the rules for using the GI (Vardar River Valley); (ii) one with legal expertise for registration of GIs registration of Vardar River Valley; and (iii) one with marketing expertise for promotion of GIs. This group should finalize its effort by initiating the birth of a GI Association. Code of Practice (CoP) Task Force- The main objective of the Task Force is to establish a CoP so consumers are assured to consistently find a specific quality wine. The CoP defines the standards and represents the foundation document for GI wine registration. These standards are developed and defined not to protect the wineries but to protect their clients and represent a guarantee that the wine production is characterized by persistent quality. Through the GI establishment, the practices are standardized -- not the final product. Most of the GIs do not have strict and fixed organoleptic criteria. Referring to the Vardar River Valley GI, it is necessary to check the national legislation on compulsory elements (some exist in the wine law), impose the need for determining GI registration procedure in Macedonia, include key elements and control mechanisms, take inventory of existing wine production practices that determine specificity of the wine produced in the GI area, and define the minimum high quality level. It is also necessary to explore possibilities to support producers who are not able to reach the set level. The CoP of a PDO or a PGI must contain: Name Description of the product, particularly its physical and chemical characteristics Delimitation as well as description of the production area features (geology, climate., etc.) Irrigation Yield Local and international grape varieties Description of production and processing Demonstration of the link to origin Control plan and traceability system Analyzing the working version of the Vardar River Valley Position paper it was observed that one of the first obstacles to be overcome is regarding the proposed GI name Vardar River Valley because a winery named Vardar Valley exists. Frédéric Julia stated that this is not a unique case of overlapping. There have been similar cases of GI names overlapping with a winery s name in France and Georgia, for example. GI registration procedure requires the GI name to be published in an Official Gazette and if no one objects to it in a 3 to 6 month period, it can be officially registered. Even if Vardar Valley Winery does not object, though, the problem of having a GI name share the brand name of a winery will manifest later while 4

5 marketing and selling the GI wine. If only one winery benefits from the joint efforts and finance, discontent is inevitable. Wineries envisioned potential problems with the name on several levels: for example, Disan is the label of one of Bovin s wines in which they invested a lot, and with the GI (PDO) initiative it is evident that several subjects within that geographical area will be entitled to use the name. The same is the case with Tikves winery s Barovo, which overlaps with the PDO Barovo. Suggestions for registration of the GI based on differences in the English and Macedonian translation or by using Cyrillic letters were discouraged. There have been other examples of countries which gave rationale that there is a different pronunciation which will make a difference: for example in Ukraine they say kanjak instead of cognac and call champagne shampanjskoye and write it in Cyrillic, but still they have been refused by the EC to register as such. It is very advisable to solve the Vardar River Valley GI name issue as soon as possible so it was agreed for a coordinative group including representative from Wines of Macedonia and the Ministry of Agriculture to meet with the Vardar Valley Winery to discuss the issue and propose resolution options. As suggested by Frédéric Julia, the missing element in the Vardar River Valley document is an answer to the question: Why is this wine so unique? What is so special about it, what is the distinctiveness and exceptionality it holds? This is the part that has to be further developed. It should imply that the varietals and the connection with the soil, technology and people from this region is what makes this wine different from other wines. It must demonstrate specific, exclusive features of the winemaking in the selected GI so it cannot be used by other countries that may profit from the reputation of this GI s wine. The part of the document regarding history, autochthonous character of varieties used, etc. is impressive but given that Macedonia is not well-recognized as a wine country, does not have registered GIs, and the varietals mentioned are unknown to European buyers, it is advisable to add some international varietals and possible blends with domestic ones (for example Vranec and Merlot or Vranec and Cabernet), making the GI more appealing to prospective buyers. Building the image on the autochthonous varieties is fine for a PDO, but for a PGI it is too risky to rely solely on autochthonous varieties that are unknown to consumers outside the Balkan region. Task Force on Formation/Formalization of a GI association. Members of a formal GI association should all be wine producers that will use the GI (Vardar River Valley) on their labels. This association should provide extensive services through adequate coordination, representation and sustainability, should facilitate access to wineries that want to use the GI protection mechanism, and should provide education and training to members who have difficulty achieving the GI standards. The association should also develop trust among producers and processors, provide a forum for discussing problems and possibilities for the GI, set up the rules for GI wine production and propose a suitable control system, etc. 5

6 Key goals of the GI Coordination Working Group for creating the formal GI association are defining the main role and functions of the structure, defining the system of fees and checking the national legislation on types and modalities of current associations. Vardar River Valley GI Association - Concerning the question on whether Wines of Macedonia can be founder of a future GI association, it was clarified that the GI association should not be a continuation of Wines of Macedonia whose founders are group of wineries that share common needs and goals broader than the Vardar River Valley GI registration. It should be a new organization with a main goal: registration of the GI and its further promotion, whose members represent all wine producers from the Vardar valley area that want to use the GI and are committed to following the set of established rules. Wines of Macedonia is an initiator of the project and will assist the process of creating Vardar River Valley association. GI Association financing - Frédéric Julia explained that members of a GI association usually do not pay a membership fee, yet the GI association financing is secured through either of the following two fee systems: (i) fee based on the quantity of produced wine (hectoliters produced ). Each producer registers and reports to the GI association the annual quantity of wine produced on which basis it issues an invoice. But in years when there is a low sale this system is not good because wineries pay for wine sitting in stock; (ii) fee based on the volume of wine sold. Wineries receive an invoice from the GI association depending on the quantity of wine sold. The Managing Board of the GI association decides on the model, which is afterwards imposed on all. If the winery decides to reject the GI association fee system then it loses the right to use the GI name. They can only use the general denomination (for example a winery would not be able to use the name Bordeaux but could only call itself French ). Following EU rules and regulations against discrimination of different producers, the GI association sets up a fixed fee per hectoliter of a GI wine for all wineries, without taking into consideration in what form the wine is sold: bulk or bottled. In different EU countries, GI protection schemes establish differences in fees among different levels of GIs (PGI, PDO, etc.) but not based on whether the wine is sold bulk or bottle. Participants agreed that setting a system of fees in the Macedonian context would be a challenge primarily because the GI (Vardar River Valley) is not developed and recognized yet, and the wineries will have to financially support the effort to build the GI name and benefit from it later on. A more acceptable financing model is the second one, i.e. the fee based on wine quantity sold. This should be supported by an internal control mechanism of keeping records and checking whether each winery informs properly on wine quantity sold. Task Force on Promotion, communication, identification of markets, defense against fraud, etc. Promotion is the crucial part for GI affirmation and recognition. Technical issues are easier to solve with expert assistance, but marketing is more complex. Promotion should be directed towards designing a collective logo for the GI; creating a strategy for GI 6

7 promotion in domestic and in particular foreign markets with the goal of building recognition, reputation and added value to GI wines; organizing joint presentations at fairs, festivals, and wine tasting events; and maintaining relations with public authorities and achieving dialogue on utilizing their networks for promotion and international recognition of the GI. Macedonian wines are well-established and have a good reputation in the Balkans but are still unknown in EU. Building reputation and eminence around a GI requires creation of a positive image and modalities to make the product recognizable. FAO/EBRD suggest several cost-effective activities for reaching desired results: - invite journalists that specialize in wine to visit the country and write articles on certain wines (particularly the ones that use specific, unique, autochthonous grape varieties present in Macedonia); - visit international wine fairs; - participate at international wine contests. Presentation of Bordeaux AOP Code of Practice Workshop participants were presented with and gained knowledge on specifics of the Bordeaux AOP Code of Practice. Frédéric Julia went through the document providing explanations on different elements of the CoP from precise boundaries of the area and listing of all villages/towns within the Bordeaux GI delimitation to color and type of product to vine density, pruning, etc. Some of the highlights include: - The wine plots that border the defined Bordeaux GI borders have a transitional period in which they are allowed to use the name Bordeaux (5-10 years). - The GI defines minimum allowed vines per hectare (e.g. 4000) and maximum allowed yield per hectare. - In France it is not forbidden to sell (or buy) wine grapes but wineries can buy wine. This means that all wine producers are also grape growers. - The fee each winery gives to the GI association is mostly used for GI wine promotion: for example to assist with promotion during Prowein, where everything connected with GI wine promotion was paid by the GI association. To pay for promotion on individual basis would have cost a lot, therefore it is worth paying the fee in the GI association for promotional activities. - At the end it was noted that the GI is for wine production and not grape production, so the grape producers can produce much more than defined with the GI CoP as long as they do not use the GI name. Also, the GI refers to wine procedures that ensure consistency of production and product quality regardless if the wine is sold as bulk or bottled. All presented CoP elements were discussed and compared within the context of Vardar River Valley. 7

8 Conclusion of the Day One Session At the end of the session, participants agreed on the following: - The work on CoP for the Vardar River Valley PGI should be continued under the CoP Task force that will be lead by the Institute of Wine of Macedonia - After an initial suggestion from Wine of Macedonia Association and FAO local representative Goran Damovski, the GI Working Group will establish regular meetings in order to monitor the progress made. It was agreed that all interested parties would meet on the last Thursday of every month. Summary of Day Two Session The workshop was organized with representatives from Ministry of Agriculture, Agriculture Inspectorate, Wine Institute in Skopje and a few wineries representatives. It was structured in two main sessions: 1. Short presentation by Frédéric Julia on key fundamentals of GI implementation and elaboration of documentation for establishing the right to register a GI and delimitation of area; 2. Discussion session aimed at analyzing national legislation, possibilities for establishing GI registration procedure in Macedonia and potential control systems for a prospective GI registered in Macedonia The presentation and discussion highlighted the following points: Registration of existing wine regions: The Government of Republic of Macedonia has submitted an application to the EC to register in the EBACCHUS list a GI Macedonia as a PGI, but this initiative was initially objected to by Greece. This is very unlikely to be accepted in the near future hence all participants agreed that alternative solutions should be explored in the meantime. The Government has also submitted an application to the EC to register the existing 16 wine regions (vinogorje) with the goal of protecting the historic names of these wine regions based on historic denomination rather than on appropriate elaboration of regions specificities and CoPs. In reality, of the 16 wine regions (vinogorja) to be registered, only 6 or 7 are truly representative of where the wine grapes are produced while the rest have decreased in production through the course of years and some have very limited vineyard areas. This was perceived as a potential problem for Macedonian wineries pursuing their intention of developing a wine GI in Macedonia since the possibility of changing an existing wine region name or denomination and boundaries is unclear. Nevertheless, the Ministry of Agriculture presented a firm standpoint that as soon as EC confirmation for these regions names is received, modifications in legislation envisaging GI registration in Macedonia can be initiated. Furthermore, Ministry representatives stated that it could be expected for the EC to 8

9 request appropriate elaboration of the vinogorja regions specificities, codes of practice, rules and control mechanisms to be provided in a certain timeframe. They stated that a meeting with EC is scheduled for the second half of April on modifications of wine protocol due to Croatia s accession into EU that will regulate wine trading between Macedonia and EU. If the submitted application registration for the Macedonia GI is rejected, a possible solution is to return to the former delimitation and registration of 3 major regions as PGIs: Central (Povardarski, equivalent to Vardar River Valley ), Eastern (Osogovsko-Pcinjski) and Western (Polosko-Pelagoniski). In this case, the process FAO/EBRD is supporting is essential for developing proper documentation and justification for registration of the Vardar River Valley GI that will later be used as a model for subsequent PGIs and PDOs. Since Povardarski translates to along the river Vardar, or Vardar River Valley, it was strongly suggested as the name for the PGI instead of Vardar River Valley thereby making the distinction from the name Vardar Valley Winery. It also differs from the synonym Povardarie, which is also the name of one of the largest wineries in the region. Control system: The control body should be entirely independent and inspect GI standards and regulation compliance. The main role of this body is not controlling wines sensory characteristics but it should be based on particular, defined specifications from the GI. The French system is organized in a way that INAO delegates control two bodies: an organization for specification that submits plan for control, conducts control and employs sanctions; and an organization for inspection, which is also entitled to conduct control but is not authorized to employ sanctions. The latter submits reports to INAO. It was noted that the control and punishment system should not be biased. It is important not to let producers conduct control by themselves. They are the ones setting up the rules and should have somebody else regulate to avoid conflict of interest. It was discussed whether the State Agricultural Inspectorate of Republic of Macedonia, as a body already responsible for current control systems of wine grapes and legislation, could potentially act as a variation of the control system to control Povardarski CoP compliance. Wineries had different opinion whether the people from the inspectorate possess adequate staff to conduct the CoP compliance inspection and suggested that they include people from the Wine Institute. Frédéric Julia stated that the Bordeaux GI association faced the same conflict: the GI association thought that the wine institute professionals should not be involved in the control system though they have the required knowledge regarding wine quality. They needed a body with sufficient technical knowledge of the inspection methodology, though, therefore the decision was to have an independent control body called Veritas, which conducts inspection in different areas and, when inspecting, checks only whether there is compliance with CoP. They are not interested and do not give comments on wine quality, taste, etc. 9

10 An alternative, perceived as more adequate by some participants, was to include a private sector i.e. independent inspection body and give the State Agriculture Inspectorate an exclusively supervisory function. Unfortunately, there is no private sector independent control body in Macedonia. Actions should be taken for its creation parallel to establishing legal procedures setting up the rules for receiving authorization by Ministry of Agriculture. Conclusion of the Day Two Session - Povardarski, which in translation means along the river Vardar or Vardar River Valley will be used as the name for the PGI thereby making the distinction from the Vardar Valley Winery. It also differs from the synonym Povardarie, which is the name of one of the largest wineries in the region. - Establishment of a GI Coordination Working Group agreeing to a defined timetable meetings to be held the last Thursday of each month. - A specific Task Force on CoP should be established under the leadership of the Wine Institute of Macedonia in which the Ministry of Agriculture should take the lead in the GI registration Task Force. - Now that there s a good momentum in the group and more clarity on which GI to work on, the objective of the project will be very much refocused on the establishment of this GI and the project work plan will be amended accordingly. Proposed next steps: In the conclusion of the workshops the following next steps were agreed upon: - The local coordinator of the project will assist in keeping the momentum of activities in order to make visible progress by June 2012 including the following: o GI Coordination Working Group and the three specific Task Force teams established and functional; o Developed Code of Practice for Povardarski GI; o Prepared prerequisites for formal GI Association Registration 10