Can companies trademark a natural phenomenon? That was the question at the center of a pair of proposals from the National Chamber of the Tequila Industry (CNIT) and the Mexican Institute of Industrial Property (IMPI). The answer, according to a final ruling by the Federal Commission of Improved Regulation (Cofemer), is a reassuring no. Both bill sponsors would like to limit the term “agave,” which refers to a whole genus of about 200 species of flowering succulent plants, to commercial use only for tequila, mezcal and bacanora drinks.
The proposals, working in concert but rejected by Cofemer and the Federal Commission of Competition (CFC), would limit both the use of the word to products made in recognized denominations of origin for tequila, mezcal and bacanora and the varietals that could be used in production.
A press release by CNIT called the continued presence in the market of other distillates of agave and sugar cane “unfair competition for our flagship drink [tequila].
“This issue concerns our industry because it damages the image and prestige that tequila has earned nationally and internationally.”
Francisco Soltero Jimenez, director general of CNIT, elaborated that the law would protect consumers who otherwise might be deceived or confused by these products.
The tequila producers, who have only just started to make international inroads in the appreciation of tequila as a fine liquor, argue that the word agave has become synonymous with quality for many consumers. Now, they would prefer to keep other beverages from trading on the hard work it took to get it there.
But the wording of the proposed laws didn’t have anything to do with enforcement of marketing truth. They would have simply banned producers of spirits, even those that legitimately do use agave plants, from using the word at all. Instead, they would have had to call their products “distilled agavacea.”Agavacea is a term for the taxonomic family that includes the genus agave, and is therefore much less specific.
They would also have been banned from including any information as to the percentage of agavacea contained in the product.
For producers of “mezcal” made outside the protected denominations of origin, their product would end up appearing far inferior to consumers.
Cofemer and CFC sided with the small distillers, saying in the decision that the bill would cause too many problems for competition, including for producers of generic beverages and non-alcoholic agave drinks.
But natural market pressures will soon bear down on small producers anyway. The agave glut of the last several years that has allowed small distillers to propagate—buying cheap excess agave from growers and selling beverages distilled from it competitively—may soon be over. In the last few months agave prices have doubled from a low of 70 centavos per kilo, and are expected to rise again to around four pesos per kilo by the third quarter of this year. The big distillers with their own fields will have no trouble weathering the looming shortage, but it could drive prices too high to be worth the while for many of the upstarts.
But in an opportunistic industry, many of these small distilleries put out unregulated, inferior product that uses very little or no agave at all anyway.
Juan Casados Arregoitia, vice president of CNIT, cited studies from the Federal Consumer Protection Agency (Profeco), which found that 82 percent of reviewed spirits that were labeled ‘agave’ actually contained none at all.
Of course, for brands that don’t really use it anyway, an agave shortage should have little impact.
Those behind these failed bills plan to continue dialogue with the CFC to come to an understanding as to why the legislation was rejected. It would seem that, rather than creating new laws to trademark proper scientific terminology, the guardians of Mexico’s adult beverage manufacturing industry would do better to concentrate on enforcing the laws that they already have to better regulate the liquors flowing from the country’s many distilleries, tequila, mezcal, bacanora or no.