Transfer of planting rights: Cognac wins its case

We talked recently about how Cognac’s good performance had attracted greedy and unscrupulous behaviour. By buying planting rights in less successful regions, producers could transfer them to Cognac and thus increase their own volumes. New measures have just put an end to the practice.

 

Cognac continues to perform well. In 2017, exports were worth 3 billion euros and volumes increased by 11.5% compared to 2016.

As for the grapes, although the year got off to a bad start with severe frosts last April, the end of the summer was better and harvest volumes ultimately fell by just 12%. The region also produces Vin de Pays Charentais, Pineau des Charentes and non-GI wines (Vin de France), but its success within the brandy industry has been attracting unwanted attention. A change in regulations in 2016 prompted the rise of what became known as the Cognac “vultures”.

A few dozen opportunists had taken advantage of a kind of “legal vacuum” within European regulations, obtaining planting rights for 300 hectares of vines by using transfers of planting rights, i.e. buying vineyards in French regions less profitable than Cognac then grubbing up the vines to generate planting rights, which were then transferred to Cognac. Whilst not illegal, the practice obviously undermines the image of Cognac.

 

The legal solution

According to Alexandre Imbert, director of the UGVC, the association of Cognac winegrowers, from now on a new Omnibus European regulation will make it possible to apply the same restrictions to brandy (i.e. wine-based spirit) as to AOC (or PDO) wines:

  • Firstly, the possibility of transferring planting rights (grubbing up/transferral/replanting) will now only be possible within the same industry.

  • Secondly, to meet demand, the industry is increasing the production area for Cognac by 1,500 hectares. The new plots of land will be distributed evenly among the various applications in order to control growth and avoid a market imbalance caused by overproduction, which could lead to lower prices, and ultimately the loss of smaller firms.

 

By Alain Echalier

25/01/2018