NEWS ANALYSIS: Against the grain

The EU has finally decided on a definition of what constitutes vodka. But not before stirring up a heated debate among producing countries. By Ron Emler

THE ROW OVER the definition of vodka that caused such passion among the members of the European Union was born of Brussels’ own desire to codify and label foods and drinks. It triggered a heated dispute between the “vodka belt”, led by Sweden, Finland, Denmark, Poland and the Baltic states, and the members of the European Vodka Alliance, spearheaded by Britain and backed by France, the Netherlands and Germany.

Until 2005, vodka was regarded by drinkers as a colourless, odourless and (many would say) tasteless white spirit used in mixed drinks and cocktails. But then the Environment Committee of the European Parliament proposed to define it in the interests of consumer protection. It came up with the draft definition of “a spirit drink produced from ethyl alcohol of agricultural origin”. It went on to say that vodka is “distilled and/or rectified so that the organoleptic characteristics of the raw materials used and by-products formed in fermentation are selectively reduced”.

In layman’s language, vodka was to be defined as a spirit distilled from any fermented agricultural product. That would have covered a multitude of raw materials including the traditional grain and potatoes traditionally used by the Scandinavian grouping and the sugar beet molasses, grapes and even citrus fruits employed by more southerly European producers. It might even have covered coal, which was allegedly once used as a base in communist Poland.

But once you try to define something that is commonly understood, you open Pandora’s box. The “vodka belt” bloc argued that grain or potatoes were the only traditional raw materials. They had used them for centuries but southern European production from other ingredients was a post-war development. Although different countries favoured different raw materials (traditionally wheat is most popular in Russia, barley in Finland and potatoes in Poland), they argued as a group that vodkas made from molasses and grapes were poor imitations and should be labelled as such. They claimed to be the dominant force, the “vodka belt”, producing 70% of Europe’s vodka and drinking 65% of it.

Effectively that would have “outlawed” about 65% of Europe’s vodka production outside the Baltic region and about a third of the UK’s output. Most supermarket brands would have become ersatz vodka, to be labelled “pure white spirit”. Given that vodka consumers are trading up into premium and super-premium brands, that was not an outcome the “southern” producers could accept. The proposed definition, they also claimed, would stifle innovation.

Globally the vodka category is worth about £6.5 billion a year from an output of about 4.5bn litres, although more than half of that is consumed in Russia. And while vodka accounts for a declining, but still huge, proportion of the spirits market in Sweden and Poland, in Britain it has, says the Gin and Vodka Association, overtaken Scotch as the biggest-selling spirit. Battle lines were being drawn over big bucks.

“We have made vodka out of potato and grain for over 500 years,” said Finnish MEP Alexander Stubb. “When we became EU members in 1995, we were told that vodka would have a tight definition, just like rum, just like whisky, just like grappa. We don’t want vodka to be some kind of alcoholic wastebasket.”

The Finnish Prime Minister, Matti Vanhanen, even accused some producers of “making vodka from wine waste”. That drew a retort from Alan Butler, the head of EU liaison at Diageo, which in 2003 launched Cîroc, the grape-based vodka with the slogan “Go against the grain” and whose Smirnoff brand is the world’s biggest seller. He wrote to the Financial Times to say that grain and potatoes were cheaper raw materials than, for instance, grapes, and that the Scandinavians had in the past used a “waste product from the paper industry” to make vodka. So much for “tradition”.

The debate in Brussels became increasingly vitriolic but what distilled the thinking of MEPs was the prospect of a trade war with America, the largest market for premium vodka. Most American-produced vodka is not grain or potato-based, so if the original EU definition had been pushed through some super-premium US brands would have been forced to find a new category name before being allowed behind Europe’s bars. Was “vodka” worth a war at the World Trade Organisation?  Despite the rhetoric, the politicians sought a compromise.

“This is a battle between the vodka belt and the wine belt, and in between lies the beer belt, which will get to decide”, said Finnish MEP Lasse Lehtinen. And so it proved. On June 19 the European Parliament voted 522 to 128 for a definition that effectively says vodka may be made from any agricultural raw material but that raw materials other than cereals and potatoes must be indicated on the label. Attempts to enforce the size of lettering giving that information have already been abandoned. The new definition is tighter than before, so everyone can claim some sort of victory, not that the consumer will notice the minuscule differences to labels when they appear.

The vote is not totally binding. It has to be approved by the Council of Ministers but that is regarded as a formality and the Finns are unlikely to resurrect Europe’s “vodka war” in their presidency of the EU, which begins on July 1.

Part of the compromise definition, however, was a bonus to the Scotch whisky industry because a subsection of the draft regulation defining vodka says that grain-based spirits may not contain flavourings or sweeteners. MEP Linda McAvan said: “This deal is vital for the Scotch whisky industry to protect Scottish brands and distilleries against cheap imitations from overseas.”    Meanwhile, Nick Soper, the Scotch Whisky Association’s European affairs director, said: “Improved EU protection for the traditional way of making Scotch whisky is a significant step forward.”

© db July 2007