Armenian brandy producers say they're unsure exactly how to market their award-winning spirits that are known to most consumers as “cognac” as an EU agreement banning use of that word comes into force.
Armenian brandy producers are required to stop naming their drink "cognac" by 2032 in return for a 3 million euro ($3.5 million) payout as part of a deal with the EU passed in Yerevan on June 10. The deal also stipulates that sparkling wine producers in Armenia using the term "champagne" need to drop that descriptor within four years.
Armenia's parliament declared the deal aimed to "promote the smooth and effective end of the use of the European Union's 'cognac' geographic indication for goods originating in the Republic of Armenia, as well as to support the development of a new name for Armenian brandy."
The agreement may have a significant impact on Armenia’s brandy producers as around 7.5 percent -- or $250 million annually -- of the Caucasus country’s exports are “hard liquor.”
In Russia, where around 79 percent of Armenia’s brandy exports are sold, the Caucasian spirit is favored as a high-end “cognac” that is vastly cheaper than the French original. In Moscow shops, most well-aged Armenian brandies cost at least 90 percent less than their French equivalents.
Russian-speakers rarely use the word “brandy” for any distilled grape liquor, and Armenian producers are currently deciding how to market their drink to Russians.
Websites for Armenia's most famous brands have dropped the word "cognac" over the past week, while some smaller labels continue to use the word in their online branding.
A spokeswoman for the Yerevan Brandy Company, which exports the famed Ararat label, told RFE/RL that Armenian producers are in "discussions" about the possible name change, but “for the current moment there is no substantive option on the table.” She added that it is "too early to discuss the possible impact" of the linguistic change in the Russian-speaking market.
Cognac is a variety of brandy named for the area where it is made, in southwestern France. EU brandy makers outside the Cognac region are forbidden by law from using the term "cognac."
Armenians first began producing brandy at scale in 1887, using methods copied from French distillers. Armenia’s smooth, vanilla-hinted blends made from grapes grown on the plains beneath Mount Ararat soon won international plaudits. According to multiple French and English-language reports, in 1902, French judges gave at least one company the right to call its liquor “cognac” after it beat out the French originals in a prestigious contest.
Joseph V. Micallef, a U.S. author and political commentator who has written extensively about wines and spirits, confirmed to RFE/RL that top Armenian producers were granted permission to use the “cognac” designation in the early 1900s but says that allowance was revoked after World War II and “In reality it's doubtful that the head of the cognac producers had the authority to grant that right.”
International treaties protecting France’s “controlled designation of origin,” that limits geographical names in branding, was only given legal weight in France in 1919, several years after the Armenians had adopted the coveted “cognac” name.
Micallef believes there is unlikely to be much disruption to Armenia’s brandy market as the enforcement of the cognac clause come into force. The analyst says “Using the term cognac was an irritant that France wanted addressed…. Paying Armenia a token amount is just a face-saving gesture so it doesn't look like France bullied Armenian producers into submission.”
One company that will immediately be affected is the Champagne Wine Factory of Yerevan, which has been producing sparkling wine named after the iconic French product since the 1950s. As well as their sparkling wines, their website www.armchampagne.am and company name will also apparently need to be renamed under the EU agreement.