A forgotten EU trade agreement is causing unexpected problems for Danish and European whisky producers, who have discovered they cannot legally label their rye-based spirits as “rye whisky.”
The 20-year-old agreement between the EU and Canada, signed in 2004, restricts European distilleries from using the term despite producing whisky with rye as the primary grain. The implications have only recently come to light, affecting multiple distilleries across Europe.
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“We are, of course, quite frustrated that a huge mistake has been made in the EU concluding this agreement. Rye, being a raw material used for whiskies in several different countries, should not be trademarked in the EU,” said Alex Munch, CMO and co-founder of Stauning Whisky. “Protecting the use of the raw material is a bit like saying that outside of France you can’t use the word ‘grape’ or ‘wine’ in your product description.”
The timing couldn’t be worse for Stauning, Denmark’s largest distillery, which just last week won Best Single Cask Rye Whisky at the World Whiskies Awards.
Geographic Protection vs. Ingredient Protection
Munch argues the agreement fundamentally misunderstands traditional protection mechanisms for regional products.
“It’s perfectly fine to protect ‘Canadian Rye’ – that makes sense. We also dream of protecting ‘Danish Whisky’ in the future. Typically, you protect a specific production method or the region where it is produced. But the agreement in its current form doesn’t make any sense,” Munch said.
The situation is particularly confusing since Canadian regulations don’t even require Canadian “rye whisky” to contain rye. Under Canadian law, “whisky” and “rye whisky” are historically interchangeable terms, dating back to 19th century production methods.
Regulatory Confusion
What makes the situation more perplexing is the complete lack of awareness about the regulation until now.
“Nobody was aware of it – and it hasn’t been enforced for the last 20 years. We went through a long approval process to get into Canada, and our rye whisky was approved without any problems,” Munch explained.
Adding to the regulatory confusion, U.S. market requirements specify that Stauning must label its product as rye whisky when sold in America.
The Danish distillery isn’t giving up without a fight. Stauning is planning to pressure the EU when the agreement comes up for renegotiation next year. The company has already gained support from Danish politicians and SMV Danmark, a business organization representing 18,000 small and medium-sized enterprises.
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“It is our analysis that this rule provides very limited value to Canada while creating an unnecessary obstacle for smaller European producers,” said Kasper Munk Rasmussen, industry manager at SMVdanmark.
Stauning ‘Censored’ Whisky
In a creative protest, Stauning has released a special “Censored” whisky with the word “rye” blocked out on the label. The limited edition will be available exclusively in Denmark starting April 1.
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