EU nears agreement to end simmering ’vodka row’

Business Day
April 3, 2007

BRUSSELS – What IS vodka, exactly? The question has split European Union (EU) governments for more than five years but they may now be on the brink of striking a deal on defining how the spirit drink may be made, and labelled.

EU experts have been trying to nail down exactly which raw ingredients should be allowed in a drink whose bottle will be labelled just as “vodka” – and nothing else – stipulating that minimum alcoholic strength by volume will be 37,5%.

The European Commission, the EU executive, had wanted to allow vodka to be distilled from any raw agricultural material provided its origin was clearly displayed on the bottle. But that view went down badly in Poland, which claims a centuries-long tradition of distilling vodka solely from grain and potatoes, as well as its “vodka belt” allies Finland, Sweden and the Baltic states of Estonia, Latvia and Lithuania.

The “vodka belt” standpoint is strongly opposed by a string of other EU countries, including Britain, Ireland and the Netherlands, which say the Polish stance is merely a protectionist tactic to corner the European vodka market.

Several compromise deals have circulated around Brussels over the last six months or so. The latest, authored by current EU president Germany, seems to have secured enough support for the European Parliament and EU ministers to reach an agreement.

It would allow vodka made from cereals or potatoes to be labelled just as “vodka”, satisfying Poland and its allied Nordic producer countries – up to a point.

Vodka made from anything else, like grapes or sugar beet molasses, would have to specify the material used. That could be done via another label on the back of the bottle, for example, which would have to be clearly visible and easily understandable but with no special requirements for size or font.

“There are a few hurdles left to go but it does look like we’re getting there. The compromise reaches out to all sides in the debate,” one EU diplomat said, adding that only “a couple of member states” were unhappy with the proposed deal.

“Poland is not wildly ecstatic, they don’t support it. But it’s very clear that this is the only compromise on the table now that has enough support,” the diplomat said.

Apart from Poland, none of the other opposed countries have a history of producing vodka but instead have traditionally made flavoured spirits.

The “vodka row” was sparked by Diageo, the world’s largest spirits group, which began marketing its Ciroc vodka in 2003 as the world’s only vodka made exclusively from grapes.

Before a final deal can be reached, however, the European Parliament must agree and then the bloc’s 27 farm ministers. There may also be some legal complications, diplomats say.

EU Agriculture Commissioner Mariann Fischer Boel has warned that Europe may risk sparking a dispute at the World Trade Organisation by adopting a vodka definition that is too narrow.

Countries including Brazil, India, SA and the US are reported to be watching the EU’s debate over vodka closely to see if their trade interests might be affected.

“There’s more work needed now with the European Parliament at a technical level to go through all the changes that might be necessary. But the substance will be sewn up in the next month or so,” the diplomat said.