Aldi's festive hangover really hit home when the European Court of Justice (ECJ) held that even products containing authentic French champagne may not be able to use the name "Champagne" without permission. Aldi sought to bring a little bit of Christmas sparkle to their 2012 holiday promotion by offering "Champagner Sorbet" in its German stores which consisted of a 12% shot of French Champagne. The French statutory corporation that represents the Champagne industry, Comité Interprofessionnel du Vin de Champagne (CIVC), took issue.

An icy reception

The allegation brought by the CIVC was that Aldi's sale of a sorbet that contained champagne and was distributed under the German "Champagner Sorbet" exploited a protected designation of origin (PDO). The PDO provides a guarantee to the public that wines with the Champagne designation have specific qualities owing to their geographical origin and compliance with the standards of production. The CIVC undertakes the safeguarding of the name Champagne and also educates consumers around the world about the Champagne region and its significance.

The European Union (EU) rules protect PDOs against any commercial use, whether directly or indirectly, that exploits their reputation. In this case, the CIVC argued that direct commercial use of Champagne when it appears, either in its native French, or translated, or as part of a product name such as "Champagner Sorbet", without consent, illegitimately exploits Champagne's reputation.

Please click here to view the image.

(Image accessible via the ECJ decision)

In a non-binding decision, the ECJ held that the packaging of the Aldi product comprising of a label featuring a prominent half-full flute with a cork in the foreground, both traditionally associated with Champagne, and a large bottle of the style used to bottle Champagne in the background amounted to illegitimate exploitation of the PDO. In the Court's view it was not possible to overlook the importance of these factors on the packaging of the product in assessing whether Aldi exploited the reputation protected by the PDO.

The ECJ went on to state the fact that the sorbet actually included Champagne, protected by the PDO, as an ingredient did not assist Aldi. The use of Champagne confers on the product, as a whole, an essential protected characteristic of the PDO. In combination with the elements of the packaging and labelling it would therefore induce the consumer to associate the product to the PDO Champagne. Therefore, the ECJ held that the inclusion of an authentic product as an ingredient in the sorbet was also an illegitimate exploitation of the PDO.

Australia's relationship with Champagne: the good, the bad and the bubbly

The early days

In Australia in the early 80s, the CIVC alleged Burton Pty Ltd had engaged in misleading and deceptive conduct by using the term "Champagne" for their Spanish sparkling wine product, Freixenet. Justice Franki held that there was no contravention on the basis that the CIVC had not established that a sufficient number of the class of people likely to be purchasers would be misled or deceived, or were likely to be misled or deceived, by the use of the word "Champagne" in reference to the Spanish sparkling wine product. His Honour held that in Australia, at that time, the term "Champagne" was commonly used to refer to a style of wine, rather than its origin.

'Champagne' today

Agreements between the EU and the Australian government in respect of many geographical indications have been in place since 1994. Since 2011, the use of the term "champagne" has been officially restricted in Australia to wines produced in the Champagne region of France which comply with the standards for production. In lieu thereof the term "sparkling wine" is the generic term for wines of that style that are produced in other locations to various standards for production.

How far our understanding of the term "champagne" and the law has come was demonstrated by a 2015 decision of Justice Beach. In that case his Honour held that the use of the name "Champagne Jayne" and claims to being an ambassador of the Champagne industry in the promotion of sparkling wines (ie. Australian sparkling wines) on social media amounted to misleading and deceptive conduct (see here for our article on that case).

Over the last twenty years Australia has fully embraced a wine culture and "people likely to be purchasers" have come to understand the difference between French Champagne and sparkling wine. All is not lost for the Australian tipple however, not only do Australian wine makers produce some highly regarded bubbles, in the 2015-2016 period Australia exported 15.2 million bottles of Australian sparkling to overseas markets, no doubt including France!

Key lessons

  • When advertising and marketing a product that contains or refers to a protected geographic indication take care to use the term appropriately and correctly or use the generic term.
  • Australian law contains additional, very specific provisions that regulate the sale of wine and spirits.
  • Consumers' understanding of the origin of a product can change over time and may reflect changes in international trade law.
  • The sale of "Champagne" in Australia should only be of the French variety to the specified production standard; otherwise, it must be referred to as sparkling wine.
  • Australia produces world standard sparkling wine.
  • For more information on avoiding the genericisation of your trade mark see here.