Tuesday, June 19, 2007

EU SETTLES ON NON-TRADITIONAL VODKA PROPOSAL

Much to the delight of Diageo and other non-traditional vodka producers, the EU parliament has voted in favor of a more relaxed definition of what constitutes vodka.

In a final proposal, Parliament decided that “traditional vodka” can only be made from grain or potatoes, but vodkas made from other substances (such as grapes or beets) can still be labeled as vodka as long as non-traditional ingredients are listed.

An earlier proposal that called for ingredients other than grain, potatoes or sugar beet molasses to be included on a label in large fonts two-thirds the size of the word “vodka” were scratched.

To put it simply, there were two opposing factions. One was a group made up of traditional vodka-producing countries such as Finland and Poland, against a group led by Diageo, Britain, the Netherlands, France and Austria.

The new compromise, approved by a show of hands, was backed by all EU governments except Poland and is likely to be endorsed by EU ministers later this month. Approval by a qualified majority of the EU's 27 member states is needed for the new rules to take effect.

Alan Butler, Diageo's corporate relations director for EU institutions, said we “remain confident that the vodka definition will remain unchanged.”

Many in the industry had warned that if the EU restricted vodka ingredients, a trade war could ensue once countries like the U.S. were prevented from selling non-traditional vodka in Europe.