The Power Of GI Protection: The Battle Over Names In The Global Drinks Market

A geographical indication (GI) offers a powerful form of legal protection that serves as a mark of quality and origin for consumers, a competitive advantage to brand owners, and a sticking point in trade negotiations. Mona Asgari explains what GIs are, what they do and why they have become a battleground for trade. 

Scotch, Tequila, Cognac... These are more than just names on a bottle, they are promises. They signal a product’s origin, tradition and quality, protected by a powerful legal concept known as a geographical indication (GI). As the global drinks market becomes more interconnected, these protected names have become the flashpoint for intense international trade disputes, pitting centuries of heritage against the realities of a globalised economy. 

The spirit of a place: What is a geographical indication? 

A geographical indication is a form of intellectual property (IP) that certifies a product originates from a specific location and possesses qualities or a reputation tied to that origin. In the spirits and wine industry, classic examples like Champagne (from France) and Tequila (from Mexico) are strictly regulated. Only producers in the designated region who follow prescribed methods can use the name. 

This exclusivity provides a significant competitive advantage. For producers, GI protection differentiates products, justifying premium pricing and helping to preserve traditional production methods. For consumers, they serve as a trusted mark of authenticity and quality. 

This inherent value, however, is precisely what makes them so contentious. Producers outside the protected regions, who may have made similar products for generations, often resist restrictions on names they consider generic. 

The battleground for GI protection: The EU v the world 

GI protection is a frequent sticking point in trade negotiations. The European Union, a firm defender of GIs, often clashes with ‘New World’ nations like the United States and Australia, which historically favour more flexible naming conventions. 

A prime example of this friction – and its potential resolution –is the EU-Australia free trade agreement, finalised in March 2026 after years of difficult negotiations. The core of the dispute was a single, globally recognised name: Prosecco. 

Case study: The Prosecco predicament 

The dispute centred on ‘Prosecco’, a name with a dual identity. For the EU, Prosecco is a protected Italian sparkling wine. For many Australian winemakers, it was the name of a grape variety they had cultivated for generations. 

The conflict was sharpened in 2009 when Italy, to strengthen its GI claim, officially had the grape’s name changed to ‘Glera’ within the EU. This move highlighted the central legal question: is ‘Prosecco’ a place or a plant? A Singapore court case further complicated matters by ruling there was insufficient evidence that consumers would be confused about the wine’s origin, underscoring the legal complexities of enforcement geographical indications. 

A compromise brewed: The EU-Australia Free Trade Agreement 

The 2026 agreement forged a pragmatic and nuanced compromise over Prosecco: Australian producers can continue to use ‘Prosecco’ as the name of the grape variety. However, the use of ‘Prosecco’ as a label on wine sold for export will be phased out over a 10-year period. Sales of Australian wine labelled ‘Prosecco’ can continue within Australia. New labelling rules will be implemented to clarify the product’s origin for consumers. 

This solution allows both sides to claim victory. The EU reinforces the integrity of its GI system internationally, while Australia protects its domestic market and gives its producers time to adapt. 

Beyond the vine: Implications for the spirits sector 

While this dispute involved wine, its resolution sets a significant precedent for the spirits industry. Many iconic spirits – including whisky, rum, and brandy – are tied to geographical identities, and similar conflicts are inevitable as global demand grows. 

The EU-Australia agreement demonstrates that coexistence is possible. It proves that with flexibility and creative negotiation, a balance can be struck between protecting heritage and accommodating historical usage in a global market. 

The Prosecco compromise and the future of GI protection 

Geographical indications exist at the crossroads of culture, commerce and law. As the global spirits market expands, disputes over the right to use a name will continue. The Prosecco compromise, however, provides a hopeful blueprint. It shows that by focusing on balanced solutions, nations can reconcile competing interests, ensuring that both tradition and trade can flourish side by side.