As exports of single malt and blended Scotch whisky hit a record high growing by 7.8% in 2018 to £4.7 billion, the industry has won a significant victory in the German courts preventing a German whisky producer using GLEN in its name.
Scotch whisky is extremely important to the Scottish food and drink industry and the wider economy. Its success is in part due to the international recognition of Scotch whisky as a high quality and exclusive product. To keep this reputation, the production and sale of Scotch whisky is tightly regulated.
The Scotch Whisky Regulations
The Scotch Whisky Regulations 2009, which apply to the United Kingdom and so all Scottish whisky distillers, provide that to be called Scotch whisky, the spirit must be distilled, matured and bottled in Scotland. The regulations also explain how the finished product must be labelled and advertised. It is illegal to pass-off a product as Scotch whisky if it is not in fact Scotch whisky. It is also illegal to put the name of a distillery on the label unless the whisky was wholly distilled at that distillery. The Regulations provide both civil and criminal remedies against anyone found to be in breach. The Regulations aim to ensure that consumers are not misled into purchasing an inferior quality product in the mistaken belief that it is Scotch whisky.
Protected Geographical Indicator
In order to prevent products from other countries being labelled as Scotch whisky, the designation "Scotch whisky" enjoys EU protection as a Protected Geographical Indicator (PGI). It also enjoys equivalent protection in many other countries.
The PGI does not prevent whisky being made outside of Scotland. For example, Japan has a booming whisky industry. However, it does prevent distillers outside Scotland calling their product "Scotch whisky" or otherwise suggesting that their product is "Scotch whisky". This avoids producers taking advantage of the reputation of Scotch whisky to create confusion or suggest a link to boost sales of their own product.
The Scotch Whisky Association ("SWA"), which represents the majority of whisky distilleries in Scotland, frequently takes action when the PGI is infringed. In 2013 the SWA brought an action in the Hamburg District Court against Mr Klotz, an online distributor of whisky, to prevent him selling ‰Û_a whisky produced in the Black Forest of Germany, named "Glen Buchenbach". The case tested the boundaries of PGI protection in the EU.
Glen Buchenbach did not claim to be "Scotch Whisky" on the bottle, so there was no direct use of the PGI. The SWA argued that consumers would assume the product was made in Scotland because many Scottish malts are named after the glen in which they are made. In response, Mr Klotz argued that the use of GLEN was a reference to the "Berglen" area of Germany where the whisky originated and that Buchenbach is a local valley. The Hamburg District Court decided to ask the Court of Justice of the EU for guidance on the scope of PGI protection.
Is Glen Buchenbach an infringement of the PGI?
The CJEU referred to Article 16(b) of Regulation (EC) No 110/2008 on the protection of GIs for spirit drinks. This article prevents "any misuse, imitation or evocation [of the PGI], even if the true origin of the product is indicated".
The CJEU said that "evocation" occurs if the average consumer is shown the name "Glen Buchenbach" and they envisage Scotch Whisky. It did not matter that the bottle was clear that the whisky originated in Germany or that the name on the bottle was the place of manufacture. The CJEU then referred the case back to the German Court to decide if "Glen Buchenbach" evokes an image of Scotch Whisky in the mind of the average customer.
Earlier this month, the Hamburg District Court decided that the use of GLEN would make consumers think that the whisky was produced in Scotland. Glen Buchenbach was therefore an infringement of the PGI and could not be used.
The CJEU was clear that the image evoked in the mind of the average consumer must be "Scotch Whisky" and not just Scotland. Bagpipes and tartan alone would likely not be enough to bring to mind Scotch Whisky even if they do make the average consumer think of Scotland. However, GLEN is widely used by Scotch distillers - more than 30 single malts start with GLEN including some of the bestselling exported brands. On the basis of such a strong link between the word GLEN and the industry, the Hamburg Court's decision is understandable.
What does this mean for protection of Scotch Whisky?
As the recent data shows, the Scotch whisky industry is crucial to the Scottish economy. Preventing other countries from making whisky and labelling it as "Scotch" or in a way to suggest it originates from Scotland is vital to protecting the industry. The Glen Buchenbach decision is a significant win for the industry and will allow it to take action where a product is clearly designed to take advantage of Scotch Whisky's reputation even if the term Scotch Whisky is not actually used.
The decision will be welcomed not just by the Scotch whisky industry but also by the manufacturers of other Scottish food and drink products which enjoy PGI protection such as Scottish beef, lamb and salmon.