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Prosecco battle: lawyers cite "dubious legality" of EU's claims

Prosecco battle: lawyers cite "dubious legality" of EU's claims

Prosecco remains a major sticking point in Australia's $100 billion free trade deal with the European Union.

Australian Trade Minister Simon Birmingham flew to Europe last month to fight for local vignerons' right to keep calling their wine "prosecco". 

Sources confirmed to The Sydney Morning Herald that the government had managed to ditch an EU proposal that would have forced Australian producers to use the name "prosecco-like" to meet demands Italy for exclusive naming rights.

Instead, a compromise that could see locally produced wine labelled "Australian prosecco" is now a "live option".

As European delegates prepare to fly to Canberra in March for further talks, researchers at Monash University say Italy's attempt to stop Australian producers using the word "prosecco" is based on a "legal fiction" that could breach both World Trade Organisation obligations and the Australian constitution.

The Monash University study is titled "In Vino Veritas? The Dubious Legality of the EU’s Claims to Exclusive Use of the Term ‘Prosecco’".

Sales of Australian prosecco are booming - they've skyrocketed 53% in the past 12 months. But their growth is being threatened by a 2009 ruling by Italian lawmakers that designated "Prosecco" as a protected region and renamed the grape glera.

The Monash study has examined hundreds of wine publications - including the Italian government's own trade and marketing material for over a century - with researchers finding virtually no references to the glera grape variety before 2009. Principali Vitigni Da Vino Coltivati in Italy - a five volume tome from the Italian Department of Agriculture - exclusively referred to the grape variety as prosecco.

The article argues that that the EU’s characterisation of the term is erroneous and is intended to protect Italian prosecco producers from international competition. 

Authors Mark Davison, Caroline Henckels and Patrick Emerton from Monash University - Faculty of Law note that "by implication, the EU regulation is likely to contravene Article 20 of the World Trade Organization’s Trade Related Aspects of Intellectual Property Agreement (which prohibits governments from unjustifiably encumbering the use of trademarks) and Article 2.1 of the Agreement on Technical Barriers to Trade, (which prohibits, inter alia, technical regulations pertaining to terminology and labelling that unjustifiably discriminate between similar domestic and imported products)."

Furthermore, a prohibition on the use of the word prosecco on Australian products in the Australian market may be inconsistent with the Australian Constitution, which prohibits the acquisition of property by government on other than just terms."

The study concludes: "The Australian government should not jettison the commercial interests of Australian wine producers without a detailed consideration of the evidence that supports or fails to support the assertions of the European Union.

"Giving in to bluster and passionate assertion rather than engaging in a principled consideration of the merits of intellectual property claims is unwise from either a principled or pragmatic perspective.

"The acceptance of one dubious claim without adequate scrutiny paves the way for the making of further dubious claims. In addition, both the EU and other governments that have banned or propose to ban imports of wine labelled as Australian prosecco should be on notice that such bans might well contravene their WTO obligations."