CRT and Heineken amicably end their dispute over the use of the word "Tequila" in Desperados beer

CRT (the Mexican Tequila Regulatory Council) announced that the legal dispute over the use of the word Tequila in Desperados beer has ended.

In a video released on 13 July 2021, Miguel Ángel Domínguez Morales (President of the Mexican Tequila Regulatory Council) indicated that an amicable agreement had been reached with Heineken after CRT had initiated several legal actions in the European Union involving the use of the word Tequila in Desperados beer.

Although the terms remain confidential, Miguel highlighted that the agreement is beneficial to both parties and that Tequila continues to be strongly protected in the European Union [its second-largest export market after the USA]. 

According to the press release, around 20 million litres are exported annually to the European Union, where more than 50 brands of tequila are available*.

Tequila is protected in the European Union pursuant to the Agreement between Mexico and the European Community on the mutual recognition and protection of designations for spirit drinks of 1997, as amended in 2004 and 2020.

In 2019, Tequila joined the EU register of geographical indications (GIs), becoming the “third spirit to … [be added to the] register … as a third country product[, after] Pisco from Peru and Ron de Guatemala. The inclusion of Tequila in the register gave it “the same recognition as EU spirit geographical indications”.

The dispute

The legal dispute had extended over some years in a number of jurisdictions. In 2017, CRT started proceedings in France and the Netherlands to “seek an injunction of sales of Desperados against Heineken, arguing that Desperados violates the Mexican geographical indication (‘GI) ‘Tequila’ under EU law”. The proceedings were suspended in France, “while the procedure in the Netherlands [was] pending at the level of the Court of Appeals in Amsterdam. A ruling [was] expected during 2021”.

Likewise, there were “court challenges pending in Mexico regarding the two decisions issued by DGN [the General Directorate of Standards] on 12 and 19 November 2020 brought by both CRT and TdS [Heineken’s supplier of ‘Tequila’] as well as an administrative investigation initiated by IMPI [the Mexican Institute of Industrial Property] on 7 March 2021”.

In parallel, in July 2020, the European Commission initiated an examination procedure following a complaint on obstacles to trade within the meaning of Regulation (EU) 2015/1843 applied by Mexico consisting of a measure affecting the import of Tequila.

The Brewers of Europe (Industry Association) filed the complaint due to CRT’s decision to “no longer grant export certificates to … [TdS] a company producing and exporting ‘Tequila’ to … an affiliate of Heineken NV … due to Heineken’s Desperados beer - a beer with an added ‘Tequila’ flavour - violates the Mexican technical standard applicable to the use of the Geographical Indication (GI)" Tequila.

During the first stage of the Commission’s investigation, 22 interested parties participated, “mostly representing associations concerned with the protection of European GIs”. Indeed, oriGIn requested the Commission to be an interested party considering the dispute’s implications on GIs principles.

Likewise, the examination procedure was also discussed by the European Parliament (read here the parliamentary question raised to the European Commission, and review here the answer).

In May 2021, the European Commission finalized the examination procedure concerning Mexico’s measure affecting Tequila exports to the EU (review the report here). It was concludedthat while the measure raises concerns on Mexico’s compliance with WTO rules, specifically the prohibition of export restrictions, it is subject to a number of pending administrative proceedings that may lead to the measure’s revocation or modification. Therefore, the Commission will continue to monitor the outcome of the various proceedings and, depending on their outcome, it may re-evaluate the actions to take” (emphasis added).

**In October 2021, the Brewers of Europe informed the European Commission “that the affected EU company had found a solution with the Mexican authorities, allowing for the removal of the alleged trade barrier”. Consequently, they withdrew the TBR complaint.

On 3 February 2022, the Commission announced that it formally ended its investigation concerning the complaint on obstacles to trade within the meaning of Regulation (EU) 2015/1843 (TBR, Trade Barriers Regulation) applied by Mexico consisting of a measure affecting the import of Tequila. Review here the announcement. 

On 7 February 2022, it was published on the Official Journal of the European Union, the Commission Implementing Decision (EU) 2022/161 of 3 February 2022 terminating the examination procedure concerning obstacles to trade within the meaning of Regulation (EU) 2015/1843 applied by the United Mexican States consisting of measures affecting the import of Tequila. Review here the Implementing Decision.

The first image is courtesy of Dante Gbn.
The second image is available on the website concerning the case CRT v Heineken, ECLI:NL:RBAMS:2019:3564, 15-05-2019, Court of Amsterdam.

*Updated on 17 July 2021.
**Updated in February 2022.
CRT and Heineken amicably end their dispute over the use of the word "Tequila" in Desperados beer CRT and Heineken amicably end their dispute over the use of the word "Tequila" in Desperados beer Reviewed by Verónica Rodríguez Arguijo on Thursday, July 15, 2021 Rating: 5

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