Saturday, November 29, 2008
In the mean time, here are some interesting news articles:
1) Direct Shipping in Michigan: think again.
Article in the Detroit Free Press. Two months ago a federal judge ruled that the state had to allow direct shipping to consumers in what sounds like a Granholm decision (I haven't had a chance to read the opinion yet). In response, state lawmakers have introduced a bill to ban all direct shipping, instate and out. Michigan is a monopoly state, with the Michigan Liquor Control Commission acting as the wholesaler in their three-tier system. It's interesting to see what monopoly states do in situations like this, because the state itself has an economic interest in preserving the status quo. For example. comparing it to Washington could be interesting, as Washington's beer and wine industries are thriving while Michigan's are near non-existent. Is Michigan protecting fledgling domestic wineries? Or just making sure they get the markup and taxes paid on all alcohol entering the state? I'll try to look more into this when I get some time after finals.
Apparently things are getting bad in Manitoba, where members of the local reservation are abusing a new type of alcohol called "Superjuice". It sounds like they're just drinking some kind of mash swill made with distiller's or "Turbo" yeast. The best part is the idea that the yeast keeps acting in people's stomachs, which sounds ridiculous to me. A consult with my resident science adviser (my wife) has let to the same conclusion. Tough as that yeast is, and I've tried some horrific rocket-fuel barleywines made with it, it's not going to keep going in your gut.
3) Radio Bordeaux Dating
No it's not a new Studio Canal show. Article on the BBC about using gamma rays and ion beams to authenticate very old bottles of wine. Should result in some interesting fraud suits in the future. Now if they can only find a way to tell if the bottle's become corked...
4) Prices are falling. So is the sky.
In the current economic climate it appears that people are less interested in paying $1,000 for a bottle of Chateau Lafite Rothschild. Champagne is down as well. Apparently now's the time to buy... (cough cough). The same is happening with Vodka in Russia. Sales are down 70% and people are turning to poisonous moonshine. Yikes. Times are bad when you can't afford $1 a liter vodka...
5) AB Merger News
Two weeks ago the Justice Department approved the Anheuser-Busch / InBev merger on the condition that they divest themselves of the Labatt brand and facilities. No word on a buyer. (Heineken?) Tuesday the companies completed their stock sale. The new share price of Anheuser-Busch InBev immediately went up 16%, the highest increase in company history.
6) Sam Caglione, of Dogfish Head, in the New Yorker
Great article on Sam Caglione, owner/brewer at Delaware's Dogfish Head Brewery in the New Yorker. I've now got a half-crazed plan to try and brew a steinbier/sahti based on his in the article. There will be extensive posting about it, if I can get ahold of some river rocks...
Monday, November 10, 2008
Here's a post I've been meaning to write for a while. In mid-October Stan Heironymus' Appellation Beer reported that the Hallertau hop growing region was denied an Appellation of Control (AOC) by the EU. Notably, the EU has already granted AOC status to a different hop growing region, the Saaz area in the Czech Republic. I'll look for more details on the Hallertau situation, but a quick search hasn't brought up anything particularly useful. If it is true, however, it brings up a question I often think about:
Should beer be granted geographic designation like wine?
For wines geographic indication seems to be obvious enough, but in many ways beer appellation and, dare I say terroir, is much more complicated. What follows is a piece I wrote on the subject a couple months back.
There are certain regions that are well known for their beer. Some examples include Bavaria for German lagers and weisbiers, Belgium for abbey and wit biers, the Czech Republic for pilseners, and Burton-on-Trent for British bitters. These regions are famous due to a combination of location and history. Traditionally, the grains and hops would have to be produced locally, and water for the brewery came directly from the area. Styles developed around what sorts of recipes worked best with the particular combination of climate, ingredients and water. In this sense, these areas are very similar to famous wine growing regions. The locale impacts everything about the wine, and the most famous wines come from regions where the ingredients and climate come together perfectly. For this reason, many famous wine growing regions have been granted protected geographic indications to ensure that wines claiming that superior name actually come from that region. In the United States, a system of American Viticultural Areas (AVA) was established to protect the name of America’s best wine regions. So the question becomes, should beer be protected the same way?
Part of what makes a successful geographic indication is a good story about the history of the industry in the region. If a beer has been produced in the location for hundreds of years, it is more likely to be given a protected indication. However, America’s brewing history is very different from European brewing history. Many European styles were developed to suit their locale over several centuries. When European brewers immigrated to the United States, they did their best to adapt to local conditions, and regional American styles did develop.
However, with an influx of German immigrants in the later half of the 1800s, Pilsener became king. America’s most famous brewing regions were originally located in areas that had clean water and access to caves in order to lager the beer. Consequently, many of the mega breweries began in regions conducive to brewing this popular style: Coors in Golden, Colorado, Miller in Milwaukee, Wisconsin, and Anheuser-Busch in St. Louis, Missouri. Other regional brewers such as Pabst and Yuengling & Sons have much the same origin. In the late 1800’s the advent of refrigerated railcars and industrial scale brewing equipment made these beers available all across the country. No longer were beer consumers dependent on local ingredients and climate for their beer. Beer became an industrial product, available anywhere for the same price and with the same taste. However, there are signs that certain regions are once again becoming known for their craft brews. Does it make sense to grant these regions, some only a few decades old, a protected status? And is American beer an agricultural product, heavily dependant on location for its quality, or is it an industrial product, easily reproducible anywhere?
There are no equivalent protected geographic indications (PGI) or designations of origin (PDO) for beer in America. However, there are several in Europe, and a review of three important indications may shine some light on the potential pros and cons of a PGI for beer.1
First, many beer styles are named after the place they originated from. No beer exemplifies this better than Pilsener. The yellow lager that is now the most popular style in the world originated in the mid-1800s in the region of Plzeň and České Budějovice in the Czech Republic, thanks to new malting techniques and particularly soft water. The beers quickly gained popularity in Germany, under the German name Pilsener, and from there made their way to the United States. Budějovice is ‘Budweis’ in German, and from that came Anheuser-Busch’s iconic Budweiser, a name they have held a trademark in since at least 1876. In the 1890’s, Budějovický Budvar began selling Budweiser Budvar in Bohemia and the companies have been in litigation practically ever since. In 2005, Budweiser Budvar was granted a PGI by the European Union, further solidifying its position as “the” Budweiser.
This illustrates the potential trouble of PGIs in relationship to trademarks. The Czech Republic claims that the terms Budweiser and Bud are geographical indications and has successfully canceled Anheuser-Busch’s trademark registrations in several E.U. member states. Since most of the styles brewed in the U.S. either have a generic name, or source their semi-generic name to a European city, it is unlikely that conflict will arise within the U.S. The main problem breweries will face regards semi-generic trade names used for beers being exported to the E.U. and under TRIPS. However, in the future there could be domestic trouble as the styles develop. A brewer in New England might face litigation for brewing a “Northwest Pale Ale” or a brewer outside Alaska might brew an “Alaskan Amber”. Only time will tell if and where geographic indications crop up within the U.S.
Second, sometimes the specific requirements of a geographical indication backfire on a brewery. Newcastle Brown Ale was one of a small number of beers in Europe to hold a Protected Designation of Origin (PDO), which was dependant on the product being brewed in “the city of Newcastle upon Tyne”. The 1996 award was also granted on the basis that the brewing process used water “taken exclusively from the area” and included a yeast and salt/water blend “unique to the Tyne Brewery”. However, in August, 2005, Scottish and Newcastle, PLC, the ale’s owner, closed the Tyne Brewery and relocated two miles away to a larger facility on the other side of the river. However, the new location was technically outside the city of Newcastle and Newcastle Brown Ale became the first product in European Union history to apply for the revocation of its PDO status.2
Newcastle is important in two respects. First, it illustrates the problem of associating the brewery with a single geographic location. Breweries are buildings, not fields, and they are much easier to move. But even a move of only two miles could take the brewery outside of its PDO.
Second, Newcastle illustrates some of the considerations that might be taken into account in establishing a geographic indication. Note that the specific brewery yeast is mentioned. Many breweries use proprietary yeast, for example the British ale Boddingtons claims that it has used the same yeast for 200 years.3 The Danish brewery Carlsberg was the first to isolate lager yeast in 1883, naming it saccharomyces carlsbergensis, a strain from which most modern lager yeasts may well derive. More recently Rogue Brewing of Newport, Oregon, has bred and uses proprietary “Pacman yeast” and Samuel Adams has bred a “Ninja yeast” for their high-gravity beers. Similarly, the archetypical “American Ale” strain of the ale yeast saccharomyces cerevisiae is alternately called the “Chico Ale” strain, after the location of the Sierra Nevada brewery, which is credited with breeding it.
Similarly, the PDO for Newcastle mentioned the particular water/salt blend. Importantly, Newcastle was not being held to the water of the river Tyne, they were allowed to blend in salts to adjust the water to their needs. This effectively eliminates water as a geographically specific ingredient. Historically, brewers were dependant on their water supply. Hop acids react with particular salts in the brewing water, and harder water is more effective at extracting hop bitterness and flavor. This made the incredibly hard water of Burton-on-Trent famous for its British Bitters. Now however, a brewery may claim a PDO and yet “Burtonize” its water by adding gypsum, chalk and Epsom salts.
A final example of a known PGI for beer is Kölsch. These beers were originally brewed in and around the German city of Cologne, “Köln” in German, and currently carry a PGI in the E.U. However, the style is very popular among U.S. craft brewers as it is a lager-like beer brewed with an ale yeast, which allows smaller breweries to produce a light tasting beer without the extra expense and hassle of lagering. None of the beers could be called Kölsch in Germany, however, and the German brewers have been anxious for the U.S. to enforce their PGI. Geographical names are covered in the TTB class and type designations under 27 CFR § 7.24, provided in relevant part:
(f) Geographical names for distinctive types of malt beverages (other than names found under paragraph (g) of this section to have become generic) shall not be applied to malt beverages produced in any place other than the particular region indicated by the name unless (1) in direct conjunction with the name there appears the word "type" or the word "American", or some other statement indicating the true place of production in lettering substantially as conspicuous as such name, and (2) the malt beverages to which the name is applied conform to the type so designated. The following are examples of distinctive types of beer with geographical names that have not become generic; Dortmund, Dortmunder, Vienna, Wein, Weiner, Bavarian, Munich, Munchner, Salvator, Kulmbacher, Wurtzburger, Pilsen (Pilsener and Pilsner): Provided, That notwithstanding the foregoing provisions of this section, beer which is produced in the United States may be designated as "Pilsen," "Pilsener," or "Pilsner" without further modification, if it conforms to such type.
(g) Only such geographical names for distinctive types of malt beverages as the appropriate TTB officer finds have by usage and common knowledge lost their geographical significance to such an extent that they have become generic shall be deemed to have become generic, e.g., India Pale Ale.
(h) Except as provided in § 7.23(b), geographical names that are not names for distinctive types of malt beverages shall not be applied to malt beverages produced in any place other than the particular place or region indicated in the name.
Under these regulations it appears that the TTB is either considering Kölsch to be a generic, like India Pale Ale under 27 CFR § 7.24(g), or more likely it is allowing the use so long as the brewery specifies that it is an American product under 27 CFR § 7.24(f)(1).
Interestingly the U.S. does appear to have some protection of geographic origin in 27 CFR § 7.25, which reads:
(a) Domestic malt beverages.
(1) On labels of containers of domestic malt beverages there shall be stated the name of the bottler or packer and the place where bottled or packed. The bottler's or packer's principal place of business may be shown in lieu of the actual place where bottled or packed if the address shown is a location where bottling or packing operation takes place. The appropriate TTB officer may disapprove the listing of a principal place of business if its use would create a false or misleading impression as to the geographic origin of the beer. (emphasis added)
One has to wonder how Sam Adams Boston Lager, brewed all over the country, is not giving a false impression of its geographic origin. Nevertheless, there appears to be the rudiments of a geographic indication system already embedded in the TTB regulations. The question becomes, could the AVA system accommodate beer?
Beer is not wine, and the current AVA system may simply not work for beer. Interestingly, existing AVAs do overlap with some of the areas best known for their craft beer, including the Sonoma and Mendocino counties of California, various parts of Oregon, and the Puget Sound region of Washington State. However, these regions are more of a reflection of an intellectual terroir, a symbiosis of passionate brewers and dedicated consumers who make the atmosphere possible.
Drawing geographic boundaries around such an area would be pointless. Famous beer regions in the U.S. are famous because their beer is currently superior, not because it was made there since the Middle Ages. Also, a specific beer is not a product of the climate in the sense that grapes are. Certainly, these brewing areas may be close to hop growing regions, but it is the hops that are dependent on the sun and the soil, not the brewery.4 Perhaps hops should have an AVA?
In Europe, hops already have a protected designation of origin. Based on Regulation No. 503/2007 of the 8th May, 2007, the designation Žatecký Chmel (PDO) was registered in the List of Protected Designations of Origin and Protected Geographical Designations.5 The designation specifies certain areas known for hop production within the Czech Republic, and specifically applies to the famous Saaz variety of hop. Žatecký Chmel is the Czech name for the hop, which has been known since the early part of the last century by its German name “Saazer hopfen.” Saaz hops are considered to be some of the finest aroma hops in the world and are indispensable in many lagers, especially Bohemian Pilsners. Similar hop growing regions could likely apply for designation in the future, such as the areas around Hallertau and Tettenang in Germany, known for Hallertauer and Tettenanger hops respectively, and Kent in the U.K., known for the iconic East Kent Golding variety. All of these varieties are grown in other parts of Europe and the United States, but it is likely that use of a geographic designation will increase the price for producers of the real thing. Would this system work in the U.S.?
The Yakima Valley of Washington State grows 75 percent of America's hops and about 30 percent of the world supply.6 The Valley is also known for its wines, and was recognized in 1983 as the first AVA in Washington State. The appellation covers 600,000 acres of land that is bordered by the Rattlesnake Hills AVA to the north, the Horse Heaven Hills AVA to the south and the Red Mountain AVA, which forms part of its eastern boundary.7 Within the AVA two sub-appellations have been recognized, the Red Mountain AVA in 2001, and the Rattlesnake Hills AVA in 2006. The Yakima AVA is also entirely within the 11 million acre Columbia AVA.
The Yakima Valley seems to be perfect for a hop AVA. Hop growers recognize three distinct growing regions within the valley, the Moxee Valley, the Yakama Indian Reservation, and the Lower Yakima Valley.8 Each microclimate is conducive to particular kinds of hops, and could even be considered a sub-appellation. It is trade practice in the industry to specify certain hop varietals as “Yakima Magnum” or “Yakima Goldings”.
Everything is in place to specify the valley as a geographical indication except for one thing. If 75% of the hop crop is produced there, how special can Yakima hops be? And if the product is not special, why bother protecting it? Some craft brews specify the type of hops used, and some specify the area. Some consumers will place special value on certain varieties grown in certain regions, such as Saaz hops from the Czech Republic, but will consumers pay more for hops grown in the Moxee Valley sub-appellation than in the overall Yakima appellation? Hops are not grapes, and the bragging rights gained from an AVA will only carry the crop so far…
1 A list of current beer PGIs in the E.U. may be found at http://ec.europa.eu/
2 Publication, pursuant to Article 12 (2) of Council Regulation (EC) No 510/2006 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs, concerning a cancellation application. 2006 O.J. (C 280)
3 Family owned until 1989, Boddingtons was acquired by the British brewer Whitbread, which in turn was acquired by InBev in 2000.
4 Of course, grains are also dependant on the sun but due to the centralized and industrial nature of the malting business it is often impossible to tell where the barley came from. Similarly, patent and trademark law already protects proprietary malting methods. A question does however remain about possible indication of traditional floor kilned malts such as Maris Otter malt, the basis for traditional British ales.
5 2006 O.J. C 204 (26.8.30)
6 Hop Growers of America, 2007 Preliminary Statistical Report, (2008), available at http://www.usahops.org/
7 27 CFR § 9.69
8 Hop Growers of America, Yakima Growing Region. http://www.usahops.org/index.
Saturday, November 8, 2008
1. Stone is coming to South Florida in mid-November! Rumor has it down the vine that a local distributor will be carrying the brewery's normal lineup of beers, Arrogant Bastard, Ruination IPA, etc. No word yet on whether we'll see their seasonals or the Vertical Epic series. This was a big topic of discussion at the 2006 AHA Conference in Orlando, where Stone CEO Greg Koch dashed all of our hopes by telling us that it would be years (2009 as I remember) before we'd see Stone in Florida. Well, it's almost 2009 and apparently patience pays. With any luck we'll get it on tap at the Titanic first!
2. The New York Times City Room blog has an interesting blog article about a trademark dispute between Garret Oliver's Brooklyn Brewery and New Belgium/Westmalle Abbey. Apparently the bottle design for Brooklyn's "Local 1" ale is too close for comfort to New Belgium and Westmalle's bottles. At the heart of the dispute is the raised ring around the neck of the bottle. Westmalle has traditionally used a single raised ring with the brewery's name on it, as has Colorado's New Belgium Brewing, and the double raised rings on Brooklyn's bottles raised some eyebrows. See below:
Brooklyn agreed to back down and redesign their bottles, at a cost of $60,000.
I actually wonder if they should have given up so easily. Certainly this is a perfect example of what the mere spectre of an Intellectual Property suit can do to a company, but they might have had some defenses. For example, one could argue that Westmalle and New Belgium's trade dress in their bottle shape hasn't acquired secondary meaning, at least within the US market. (How many average beer drinkers know Westmalle exists, let alone what its "distinctive" bottle looks like?) Yes the bottle shape is part of the the overall presentation package, but I doubt the popularity of these brands (delicious as they are!) is such that they have a credible secondary meaning in the mere raised ring.
And there's no chance of confusion to the consumer, as 1) the consumer is probably looking at the label anyway, and 2) though Westmalle does come in a 75cl corked bottle, that bottle doesn't have the raised ring! Nor do New Belgium's large corked bottles (La Folie, for example) come with the raised ring.
However, it is possible that the monks might have some sort of protection under treaty or international convention, TRIPS for example.
Just goes to show how murky IP issues can be, and, in Brooklyn's case, how sometimes they're just not worth fighting over.