International Herald Tribune
Warren Giles
Bloomberg News
January 30, 2007
GENEVA Diageo moved closer to keeping the right to label a spirit distilled from grapes as “vodka” Tuesday after European lawmakers dismissed Swedish calls to limit the spirit’s raw materials to more traditional ingredients.
Sweden’s Vin & Spirit, which makes Absolut vodka, as well as Polish, Finnish and Baltic distillers, want to limit the use of the name to alcohol made from grain or potatoes. They say vodka is entitled to the same strict ingredient rules in the European Union as applied to whiskey or rum.
Vodkas distilled from less traditional ingredients like grapes or molasses make up about 10 percent of the vodka market in the EU. Diageo has produced Ciroc vodka from French grapes since 2003.
The vote by the European Parliament’s Environment and Food Safety Committee permits vodkas that are not made from potatoes or cereals — provided they are labeled as such.
“Vodka has always been made from a wide range of raw materials and the Parliament has agreed to set minimum standards and given the clear view that the raw materials shouldn’t be restricted,” said Alan Butler, a spokesman on EU affairs for Diageo.
The proposal, a first step in updating an 18-year-old law, still needs further approvals from the full Parliament and the EU’s 27 governments.
Diageo, which owns the grain-distilled Smirnoff brand, would be satisfied with a law that requires distillers to list ingredients on the labels, as most already do, Butler said.
Diageo prints the wording “distilled from fine French grapes” on bottles of its Ciroc brand vodka.
Peeter Luksep, head of European affairs for Vin & Sprit, which makes Absolut from wheat, said the company would have preferred to avoid “hybrid categories.
“But if this leads to legislation that works as intended, it would deter producers from using unusual raw materials” because they’d have to declare them on the bottle, he said.
The debate over changes to an EU definition dating from 1989 pits countries that were not members of the bloc at the time — Poland, Sweden, Estonia, Latvia, Lithuania and Finland — against Britain and France, which don’t have a tradition of making the spirit.
Diageo may seek to buy Absolut when the Swedish government puts the brand up for sale, chief executive Officer Paul Walsh said last month.
Absolut is the second-most popular vodka brand in the U.S. after Smirnoff, the most popular brand worldwide.
