Counterfeit or Artisanal Mexican Spirits? Pick your Poison, or your lime wedge

New proposed regulations in Mexico threaten the ability of small producers of artisanal agave spirits to market what makes them artisanal

Much like how the farm-to-table movement in restaurants has placed the source of the food on your plate front and center, the Mexican agave artisanal spirits movement is highlighting each element that goes into a glass, from the cultivation of the plant and the methods for harvesting and cooking the piña to the distillation process and ultimate bottling. Long gone are the days of tequila or mezcal with its worms, relegated to shots and frozen margaritas.

“New” Mexican agave spirits are making inroads in the American bar scene precisely because they can be marketed as artisanal and small-batch, with a focus on the specific types of varietal used in the distillation and the specific regions in which they are produced—a transparency that’s particularly attractive to American bartenders and imbibers alike. However, a new regulation proposed in Mexico may severely limit what information will appear on bottles of Mexican spirits in the future.   

  traditional mezcal production  source:  flickr.com

traditional mezcal production source: flickr.com

In a proposed regulation first published in November 2015, the Mexican government plans to create new classifications and requirements for labeling and marketing of agave spirits, which it claims will combat the issue of counterfeiting and better protect brands.

The introduction to this new regulation, PROYECTO DE NORMA OFICIAL MEXICANA PROY-NOM-199-SCFI-2015, “BEBIDAS ALCOHÓLICAS – DENOMINACIÓN, ESPECIFICACIONES FISICOQUÍMICAS, INFORMACIÓN COMERCIAL Y MÉTODOS DE PRUEBA,” or “NOM-199,” states that its purpose is to protect consumers from deceptive marketing by setting standards for the naming, production, and testing of agave spirits produced in Mexico. 

In spite of the positive intention behind the new regulation, these same classifications and regulations may ultimately create consumer confusion and threaten the ability of legitimate small producers to advertise the special qualities of their authentic spirits that are driving the increased demand in the marketplace. Outrage is being voiced on industry-specific blogs, with fears that the proposed regulations will hamstring small producers from standing out in an increasingly-crowded field of competitors, both licit and illicit.  

NOM-199 will change how many Mexican spirits are named and categorized. The biggest change under the new regulation is the creation of a new umbrella spirit called “komil.” Under NOM-199, any agave distillate spirit that is 51% or more agave and is produced outside of certain defined Denomination of Origin regions in Mexico must be labeled komil, a word not defined in the regulation nor known by most consumers, but which appears to originate from the Nahuatl word for “alcoholic beverage.”

In the new world of Mexican spirits there would be no distinction between a small-production 100% agave spirit made using traditional methods, and a 51% agave / 49% filler mixture, including industrial spirits made on a mass scale in commercial facilities. No reference can be made to what agave varietals are used; in fact, the word “agave” itself cannot be used in any labeling. As a result, small producers would be unable to distinguish their products based on agave varietal, location, or production method and consumers would have no clue what they were imbibing under the komil name.  (To further complicate matters, Wild Agave Imports, LLC of Texas filed a USPTO intent to use trademark application in January for the word mark “Komil.”)

It is not yet certain that this regulation will, in fact, be enacted. A similar regulation was defeated in 2012 after a concerted effort by independent producers and retailers. There are already a number of petitions opposing NOM-199 that have are gaining support, and it may very well be that the public outcry will be enough to change the course of this regulation. On March 17, David Suro, president of the Tequila Interchange Project, a non-profit advocating on behalf of the agave distilled spirits industry, and one of the leading voices of Mezcal promotion in the United States, and others filed their comment in opposition of NOM-199 with Mexico’s Regulatory Commission.

Retailers and consumers of agave spirits here in America should watch with interest as NOM-199 goes through its comment and enactment process. Depending on what happens, we should all keep our eye on the Mexican spirits that end up behind bars and on shelves in the near future.  

  1. CBD: An Exciting New Fall Schedule… or Not?
  2. MISSISSIPPI RISING - A VICTORY FOR LEGAL RETAILER TO CONSUMER SALES, AND PASSAGE OF TITLE UNDER THE UNIFORM COMMERCIAL CODE
  3. California ABC's Cannabis Advisory - Not Just for Stoners
  4. NEW CALIFORNIA WARNINGS FOR ALCOHOLIC BEVERAGES AND CANNABIS PRODUCTS TAKE EFFECT AUGUST 30, 2018, NOW INCLUDING ADDENDUM REGARDING 2014 CONSENT AGREEMENT PARTIES AND PARTICIPANTS
  5. National Conference of State Liquor Administrators – The Alcohol Industry gathers in Hawaii to figure out how to enforce the US “Highly Archaic Regulatory Scheme.”
  6. Founder John Hinman Honored with the Raphael House Community Impact Award
  7. ROUTE TO MARKET AND MARKETING RESTRICTIONS - NAVIGATING REGULATORY SYSTEM CONSTRAINTS
  8. Alcohol and Cannabis Ventures: Top 5 Legal Considerations
  9. ATF and TTB: Is Another Divorce on the Horizon? What’s Going on with the Agency?
  10. STRIKE 3 - YOU REALLY ARE OUT! THE ABC'S STRICT APPLICATION OF PENALTIES FOR SALES TO MINORS
  11. TTB Temporarily Fixes Problem with Fulfillment Warehouse Tax Credits - an “Alternate Procedure” for Paying Taxes & Reporting
  12. CUSTOMERS WHO HAVE HAD ONE TOO MANY - THE FREE TRANSPORTATION DILEMMA
  13. The Renaissance of Federal Unfair Trade Practices - Current Issues and Strategies
  14. ‘Twas the week before New Year’s and the ABC is out in Force – Alerts for the Last Week of 2017, including the Limits on Free Rides
  15. Big Bottles, Caviar and a CA Wine Strong Silent Auction for the Holidays!
  16. The FDA and the Wine and Spirits Industry – Surprise inspections anyone?
  17. NORTHERN CALIFORNIA WILDFIRES: UPDATED REGULATORY AGENCY DISASTER RELIEF RESOURCES AT A GLANCE
  18. NORTHERN CALIFORNIA WILDFIRES: REGULATORY AGENCY DISASTER RELIEF RESOURCES AT A GLANCE
  19. Soon to come to your Local Supermarket– Instant Redeemable Coupons of the digital age!
  20. The License Piggyback Dilemma – If it Sounds Too Good to be True, it Probably is
  21. A timely message from our Florida colleagues on the tied house laws, the three-tier system and the need for reform
  22. ABC Declaratory Rulings – A Modest Proposal Whose Time has Come
  23. More on FDA Inspections - Breweries, Distilleries and Questions
  24. WHY THE FDA IS INSPECTING WINERIES
  25. Senate Bill 378—The Proposed Demise of Due Process for Alcohol Licensees
  26. ABC Enforcement - Trends and Predictions
  27. The Corruption Chronicles – Volume One: A New Hope
  28. New Alcohol Delivery Oversight on the Horizon
  29. Michigan: Canary in the DtC Coal Mine?
  30. California ABC and Federal Credit Laws – Active Enforcement and Lots of Questions!
  31. Big Bottles For The Holidays - The Highest Calling Of The Winemaker's Art
  32. FINAL COMMENTS TO TTB NOTICE 160 DUE ON WEDNESDAY DECEMBER 7TH – WE ARE ASKING THE TTB TO EXTEND THE COMMENT PERIOD AGAIN TO ALLOW FOR INDUSTRY NEGOTIATION AND ALIGNMENT OF INTERESTS
  33. SONOMA COUNTY WINERY USE PERMITS, EVENT RESTICTIONS AND DTC
  34. New TTB Labeling Requirement Regulations: Out-of-State Bottling Is Not Created Equal and Consumers Right to Know Where the Grapes in their Wine Come from is Compromised
  35. Isn't A Written Agreement With A Distributor Worthless In A Franchise State?
  36. Crowd Funding for Alcohol Producers and Retailers – Down the Rabbit Hole with the Tied House laws
  37. Everything you ever wanted to know about the BPA Warning Statement but were afraid to ask
  38. AB 2082 - A Hunting License for Police and a Lethal Weapon for Politicians that Deprives Licensees of Currently Available Due Process Rights
  39. “Better Late Than Never”-- Judge in Illinois Dismisses 201 Sales Tax Cases against Retailers
  40. The Day the Music Almost Died: The Story of the BottleRock ABC Accusations, the ABC Appeals Board and a Victory for a Common Sense Interpretation of the Tied House Laws
  41. The Arsenic in Wine Class Action Dismissal – what it means
  42. Counterfeit or Artisanal Mexican Spirits? Pick your Poison, or your lime wedge
  43. Warning - CA ABC enforcement teams are on the prowl this weekend!
  44. RELIEF AT LAST! ILLINOIS MOVES TO FIX THE SALES TAX LAWSUITS AGAINST OUT-OF-STATE SELLERS BUT PROPOSES TO PENALIZE WINERIES AND RETAILERS THAT SHIP WITHOUT PERMITS
  45. The TTB Speaks on Category Management or, be Careful What you Ask for Because you might Get it!
  46. Hinman & Carmichael LLP Announces the Addition of Jeremy Siegel to its team of top beverage law lawyers
  47. 2016 LEGISLATIVE UPDATES: Part IV
  48. 2016 LEGISLATIVE UPDATES: Part III
  49. 2016 LEGISLATIVE UPDATES: Part II
  50. 2016 LEGISLATIVE UPDATES: Part I
  51. Hinman & Carmichael LLP is Hiring!
  52. John Hinman Presents NBI Webinar on Basics of Alcohol Beverage Law
  53. ABC DISMISSES SAVE MART GRAPE ESCAPE ACCUSATION BUT REFUSES TO ADOPT JUDGE’S DECISION FINDING NO STRICT LIABILITY FOR ABC VIOLATIONS
  54. Speakeasies are still with us, and proliferating!
  55. The War for the Soul of Sonoma County – the Winery Working Group Battle
  56. Santa Claus isn’t the only one coming to town this Christmas!
  57. Arizona's Direct to Consumer Shipping Rules - An Exercise in Complexity
  58. AB 780 - Social Media and the ABC: The California Legislative “Fix” that Fails
  59. Illinois Finally Offers Certainty and Relief for Victims of Sales Tax Lawsuits, but Prompt Action is Required in Pending Cases
  60. A Modest Proposal – Adopt the federal rule on Tied-House liability in California
  61. The Grapes Escaped - Why the First Amendment Matters
  62. Appellate Court Ruling Strikes Blow Against State’s Arbitrary Beer Label Ban
  63. Illinois Attorney General's Office Announces Intention to Dismiss False Claims Act Against Liquor Retailers
  64. Commercial Speech And Alcoholic Beverages - Part III
  65. Commercial Speech And Alcoholic Beverages - Part II
  66. Craft Beverages: Social Media Marketing the Effective and Compliant Way
  67. Commercial Speech And Alcoholic Beverages - Part I
  68. A LAYPERSON LOOKS AT ARSENIC IN WINE
  69. The Biggest Retailer in the World vs. the TABC
  70. Rebecca Stamey-White presents Emerging Issues in Wine Law
  71. Top Beverage Alcohol Law Firm Adds and Elevates Partners
  72. Illinois Qui Tam Lawsuits—Private Enforcement Of a State Claim: A Bonanza For A Plaintiff’s Lawyer And A Rip-Off Of Retailers
  73. BOOZE RULES OF SOCIAL MEDIA: The Retailer Right to Pay Exception
  74. LIONS AND TIGERS AND TWEETS, OH MY!
  75. AB 2004: Brewer's Incremental Parity with Wine Makers
  76. Expanding, Proud Of It, and Wanting to Tell the World
  77. DC Weighs in Strongly on Third Party Marketer Delivery Services
  78. “Visual Links” between Beer, Wine and Spirits Labels and Retailers Ruled Unlawful in California — the tied house laws run amok
  79. Hard Cider Legislative Update
  80. New Marketing Model for New York – Lot 18 and the NYSLA
  81. Sweeping Changes in Proposed NYSLA Bill Include Expansion for Craft
  82. Minimum Resale Price Policies - How to Control Price-Cutters
  83. AB 2130 – Gloves Off?
  84. “Gluten-Free” Labels for Wine, Beer and Distilled Spirits. We’re Still Waiting.
  85. AB 1252: Sanitation Overkill?
  86. Growlers: Not Just for Beer Anymore
  87. California Legislative Roundup 2014
  88. Build It and They Will Come: Craft Products Get New Privileges in CA and TX
  89. AB 1128: Veto of the “Serve a Minor” Felony Penalty Bill, or How to Lose a Winery in One Sale
  90. California Grocers Association v. ABC, Part 2: California Appeals Court Vacates ABC’s Adoption of a Trade Advisory That Correctly Guided Licensee Conduct
  91. California Grocers Association v. ABC, Part 1: California Appeals Court Prohibits Alcohol Sales at Self-Check Out Stands
  92. AB 1128: The “Serve a Minor” Felony Penalty Bill, or How to Lose a Winery in One Sale
  93. The New York SLA and Online Wine Sales: A Work in Progress
  94. California SB 635: What the 4am Bill Really Means for California Communities
  95. Electronic Invoices in California: Welcome to the 19th Century
  96. The History of Amazon and Wine: What Has Changed?
  97. Third Party Marketing Checklist
  98. BOOZE RULES – PROMOTIONAL APPEARANCES AND AUTOGRAPHS
  99. Washington State: Down the Rabbit Hole of the Tied-House Laws