Popping Prosecco’s Bubble

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July 15, 2019
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Popping Prosecco’s Bubble

Italian wine producers are concerned at copy cat products being marketed from overseas and Australian wine growers are a prime target for their concern. ‘Prosecco’ wine has been produced in Italy since at least 1382 and perhaps longer as Roman archives record wine production in Italy’s Treviso region. However in Australia ‘Prosecco’ has been growing in popularity with sales increasing by 53% in the last 12 months.

The wine derives its name from a town in North West Italy near Trieste. To protect its status Italy changed the name of the grape from Prosecco to ‘glera’ in 2009 then tried to register ‘Prosecco’ as a GI (Geographical Indication) in an attempt to obtain the same protection as ‘Champagne’ which is one of the most famous GI’s. This failed due to objections from Australia.

A GI allows grape farmers to protect names based on location provided that both the product and production occur within the set territory. It allows producers to avoid the ‘commodity trap’ (ie a situation where products, even complex ones, are downgraded to ‘commodities’ with limited differentiation and where competition is purely price based).

The EU has existing agreements which have already impacted Australia. For example Australia can no longer export under the name ’Prosecco’ to Japan.

Because Australia has a wine agreement with the EU, Prosecco is likely to be a contentious issue in a new and broader trade deal being finalised. The Australian wine industry believe that the Europeans are using devious tactics to claw back the Prosecco brand and that this could impact Australia’s $200 million wine exports of Prosecco which have increased by 400% in recent years. However, trade minister Simon Birmingham stated that it is too soon to say that Australian producers will have to give up the name ‘Prosecco’.

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