Maximiliano Morales reports on a bitter South American trade dispute.
Many wine-drinking visitors to Chile find themselves beguiled by the local spirit pisco, typically served as a sour with lemon or lime juice. Years of international dispute have persisted over the origin of this spirit made from the distillation of wine grapes that Chile and Peru have produced since colonial times. For years they have faced problems in global markets because they cannot agree which country first produced it.
A breakthrough came recently when the Chilean Minister of Agriculture Antonio Walker said that Chile was open to recognising the name of Peruvian pisco, if Peru would do the same with the Chilean distillate. ‘Our proposal considers that Chile and Peru would complement each other in recognising the appellation of origin of both countries in international markets', Minister Walker told the Chilean press.
Walker himself raised the issue with the Peruvian Minister Gustavo Mostajo when the Chilean Minister visited Peru two weeks ago. ‘The issue has become expensive for both countries because in every single market a pisco brand wants to sell, there is a litigation that costs us money. If we are the only two countries producing pisco, instead of litigating in all countries, it would be better to be able to complement and recognise each other so as not to prosecute the entry of Peruvian and Chilean pisco in each market', explained the Chilean minister.
According to the newspaper El Comercio, 41% of Peruvian grape distillate exports go to Chile but cannot be labeled as pisco there. Instead, the Peruvian brands have to be labelled Destilado de Uva (grape distillate) since according to Chilean regulations, pisco can be produced only in the (Chilean) regions of Atacama and Coquimbo. Peru does the same in its territory to protect its own products. If a Chilean brand wants to sell in the Peruvian market, it too has to be labelled Destilado de Uva.
But this historical dispute has reached international markets, as each country claims the exclusive right to be recognised in other countries. In this context, India has recognised the Peruvian appellation of origin, but Chile appealed against this.
‘It is a very sensitive issue for them (Peru) and for us, but in India we are in litigation. In Thailand too, and we are both spending a huge amount of money on lawyers. We are the two countries producing pisco in the world and we believe that this issue, through a good relationship, can be settled better than in the courts', Walker told a local newspaper.
One thing that made Chile rethink its strategy was when the Association of Pisco Producers of Chile lost the battle against Peruvian organisations in India after a nine-year-long dispute.
Japan, Australia, New Zealand and Mexico, among others, recognise Chile's right to the Pisco appellation*, while the United States, Canada, China and the European Union accept both countries. India joins Nicaragua, Cuba, Panama, Venezuela and Colombia that uphold Peru’s right to the name.
The Luksic Group owns Viña San Pedro Tarapacá and CCU, a company that produces several Chilean pisco brands such as Mistral, Mistral Ice, Mojito Ice, Ruta Cocktail, Campanario, Control C, Tres Erres, Moai Tres Erres, La Serena and Horcón Quemado. In partnership with the Dutch group Heineken, CCU bought 40% of the American group American Distilling Investments (ADI). This company has among its assets BarSol, a firm that produces Pisco in Peru and has an international distribution network. The Marnier-Lapostolle family from France that owns Lapostolle winery in Colchagua Valley in Chile bet on the pisco niche and has promoted their brand internationally with considerable success.
Miguel Torres Chile is also producing the winery’s first pisco in the Limarí Valley in the Coquimbo region. Made from Muscat grapes, it's called El Gobernador, expanding the category with other family-owned producers such as Alamo, Los Nichos, Bauzá, Waqar and others. Below are the rather dramatic pisco vineyards in desert conditions in Elqui.
While working as the wine specialist on National Geographic's Explorer Expedition ship, I find many of the guests wonder why they cannot have the two piscos during the same voyage and why, as a Chilean, I cannot promote the Peruvian product as pisco but have to call it a Destilado de Uva.
If the dispute between Chile and Peru over the name pisco could be resolved, it would presumably allow pisco much more of a chance to compete globally with other spirits. Having Chile and Peru united in facing the market as a historical South American cluster would presumably open more markets.
But the olive branch recently extended by Chile has now been firmly rejected by the Peruvians, who are convinced that they alone have the right to the Pisco name. So there is no end in sight to this particular trade war.
* John Barker, NZ-based expert on legal matters in the drinks business, points out that New Zealand and Australia have also recognised Peru's right to use the term Pisco and he suspects that Japan and Mexico may well have done too.