Distribution of Wine in France

Practical Guide

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France: a traditional producer, loving red wine

With 46,4 million hl of wine produced in 2018 – amounting to the 16,4% of the world production – France is the second worldwide producer, following only Italy.

The average value of the wines produced, however, is very high, and places France in first place in the turnover ranking with a trade value of €9,1 billion (41% of the EU), ahead of Italy (€6 billion) and Spain (€2,9 billion).

All this makes France a market that is difficult to access to foreign exporters, as domestic consumption is mostly directed towards its own varieties and PDOs. Despite this, however, it offers various possibilities to exporters who know how to meet the market demands and particularities.

Among these, just think that consumption is totally driven by red wines (54%), although rosé has spectacularly increased over the years. The 100,2 million cases sold in 2017 makes France the largest consumer of rosé in the world. This is twice the consumption of whites, which constitute about a quarter of total consumption. It is also worth noting the substantial increase in IGP wines, the “bag-in-box” consumption and the constant increase in online sales, for an estimated global turnover of € 500 million in 2019.

The classification of wines in France

French wines are classified – depending on the quality – as follows:

AOP (Appellation d'Origine Protégée): This category includes the AOC (Appellation d’Origine Contrôlée) and the VQPRD (Vins de Qualité Produits dans des Régions Déterminées). This is the highest denomination and requires the wine to be produced in a geographical zone strictly delimited and to respond to high standard of quality.

Vin IGP - Indication Géographique Protégée (ex- Vin de Pays). Instead of style and tradition, this category focuses on geographical origins, hence offering winegrowers greater freedom than AOC;

Vin sans IG de France (ex- Vin de Table) appellation refers to the most basic quality tier of French wine.

IP Protection in France: not only the trademark registration

Counterfeiting is a marginal phenomenon in France, nevertheless, IP protection remains one of the priorities for market operators. Suffice it to say that several great French wines (e.g.: the Pomerol, Margaux and Pauillac) have been counterfeited and the bottle of Château Mouton Rothschild 1946 is undoubtedly one of the most copied in the world.

First step for the protection of IP rights, then, is the trademark registration. As seen in the EU section of this guide, indeed, it is possible both to apply for the registration of a national trademark, valid only in France, and for the EU trademark, providing protection in all Member States.
National French registration grants trademark owners exclusive rights on the registered sign for the goods and services identified in the registration.
An application for registration of a trademark identical or similar to another already registered is considered a violation of a trademark, therefore it is advisable to carry out clearance searches before filing the registration, in order to reduce the possibility of rejection.

The trademark registration costs € 190 for 1 class (Nice Classification is applied) + € 40 for each additional class. It lasts 10 years from the filing date, renewable for a further 10 years through a declaration, to be sent to INPI in the six months preceding the expiry of the deadline. Definitive registration takes approximately 4 to 5 months from the date of application.

Possible oppositions to the registration can be submitted within two months after the publication of the application. The cost of the opposition of € 400 must be paid to INPI.

Fortunately, in addition to trademark registration, technology has provided several tools to combat counterfeiting, such as bubble codes, RFID or seals. Sometimes visible, sometimes hidden, they are strategically placed either on the bottle itself or on its cap, label or capsule and allow to track possible gray market and forging activities.

Labelling of wine: some French particularities

France has a complex and well-established wine legislation, which applies and integrates EU Regulations (in particular: 607/2009 and following modifications), already seen in EU-guide.

There are a few warnings for French wines:

  • name and address of the bottling company followed by "embouteilleur" or "mis en bouteille par". When the bottler's name or address contains or consists of an appellation of origin or a geographical indication (and it is a wine without a geographical indication), this information must be coded. In this case, the label must clearly indicate the name and address of the other parties involved in marketing (distributor, seller, etc.), for example: mise en bouteille par EMB XX XXX France - Distribué par X.
  • the correct mention of AOP is “appellation d’origine protégée”, it is possible to skip it if the label contains : “appellation d’origine controlee” or “Appellation X controlee” but it is forbidden to use “appellation X protégée”.
  • method of production : “élèvé en fût or « vieilli en fût » can be used only when the wine is produced in France and the half of production fermented for at least 6 months in a wooden container.
  • denominations as “Chateau”, “Domaine”, “Clos”, “Mas” are applicable for wines that:
    • Have an Indication Géographique;
    • Are exclusively produced from the vineyard producer;
    • have been vinified entirely in the winery of the producer.
  • Clos”, “Cru”, Château” are only applicable for the AOP wines.

The mandatory label information (please refer also to the EU guide) requirements hereby stated should be set out in one or more EU official languages, with two exceptions: (i) the allergens and sulphites information needs to be provided in French or English; and (ii) “appellation d’origine controlée”, “vendanges tardives “, “mise en bouteille à la propriété” must be in French.

Allergen labelling rules apply to beverages containing more than 1.2% by volume of alcohol and it is mandatory to report the presence of milk or egg is the volume is > 0,25mg/litre. Alcoholic beverages containing sulphur dioxide and sulphites at concentrations greater than 10 mg/kg or 10 mg/litre must be labelled “Contains sulphites” or “Contains sulphur dioxide”. It is not permitted to replace the word “sulphites” with “SO2”or “E220.

Organic wine production rules are laid down by Regulation (EC) 834/2007 and Regulation (EC) 889/2008. Label references for such wine should be given with regard to raw ingredients of the wine (grapes, sugar, rectified concentrated must, etc.) such as “Wine from organic grapes” and may not simply be referred to as “Organic wine”.
Wine labels may also include claims such as “bio-dynamic”, as long as such a term does not mislead consumers.
Here an example of correct labelling.

Restrictions for wine advertising in France

In France, advertising restrictions for alcoholic beverages result from the law of the 01.10.1991 - Loi Evin codified in Article L. 3323-2 of the Public Health Code (Code de la santé publique), authorizing the wine advertising only through the following media:

  • written press except publications for youth • Radio during fixed hours determines by Decree form the State Council;
  • posters and signs throughout the territory;
  • promotional objects related to product consumption: glasses, buckets, and plugs;
  • writings on vehicles used for normal beverage delivery operations - must remain understated;
  • commercial documents.

It is worth reminding that sponsoring, TV and cinema advertising are expressly forbidden in France. In any case, wine advertising must state that “alcohol abuse is harmful to health”.

Customs clearance and excise duties for the export of wine to France

As seen in the EU section of this guide, EU Single Market allows operators to move goods freely within the Single Market, without any costs or quantitative restrictions, only by filing a monthly Intrastat Declaration (in France known as “DEB”), covering all the intra-Community trade.

All third-country companies are subject to the specific formalities when exporting goods into the EU we have already seen in the EU guide.

Taxation of wine in France

Custom Duty Tariff: France is part of the European Union Customs Union, therefore please refer to the EU section of this Guide.

Value Added Tax (VAT) (20%): French equivalent for VAT is called “Taxe sur la Valeur Ajoutée” and ordinary rate of 20% applies to wine purchase, except if it is consumed at a bar or restaurant, where the tax rate would be 10% (the same than the food consumed at the restaurant).

Excise tax on alcohol. As of 2019, wine consumption is subject to the following excises: € 3,82/hl for the still wine and € 9,44/hl for the sparkling wine.

Distribution Agreements for the sale of wine in France

There is no specific legislation in France regarding distribution contracts, but only some specific provisions regarding pre-contractual information and termination of the relationship.

In addition to what has already been seen on the EU part of this guide, here below a quick overview of the clauses deserving a careful review before the contract is signed:

  • termination. Article L. 442-6, I, 5° of the French Commercial Code, in case of abrupt termination of a distribution agreement, protects the party who has not terminated the agreement, granting a compensation for damages. This is a ‘public policy’ provision and therefore cannot be waived. We suggest, therefore, to pay particular attention to the warning period when terminating an agreement: usually the French Courts requires at least 1 month per year of relationship. In this Legalmondo article, we analyzed in detail this peculiar aspect of the French law.
  • territory & exclusivity. The territory has to be exactly defined and the contract may provide that exclusivity can be unilaterally revoked by the producer if the distributor does not reach certain sales quantities (“Minimum target”).
  • duration & stock. As for the fashion sector, the agreement has to consider the production specificities of each year, related to the trend of the harvest. The contract, therefore, can have a fixed term of duration, with a renewal option under certain circumstances. In drafting the contract, it is also necessary to take into consideration possible residues of stock and the repurchase methods of the unsold items.
  • online sales. As a foreigner producer, selling online in France is rather complex, because the French law requires various licenses, according to articles L3332-1-1, L3331-4 and R3332-4 of the French public sanitary code. In consideration of the complexity of the French legislation, we suggest requesting the advice of an expert lawyer for the drafting of a distribution contract with a French commercial partner.

Contracts for the distribution of wine in France

Creating a network of commercial agents is certainly one of the easiest ways to enter the French market. These agreements are mainly governed by the EC Directive 86/653, which has harmonized the discipline in all member states (please refer to the EU part of this guide).

Even in this case, however, the French law has some peculiarities we have already examined in this Legalmondo article and to which reference is made for extensiveness. Here below a summary of the most salient points:

  • independency: the commercial agent need to be independent, so, when drafting the agreement, we suggest to pay particular attention in order not to confuse an agent with a VRP (sales representative), as the latter is considered an employee, with greater rights and compensation for termination of contract.
  • register. The agent must be registered in the register of commercial agents of the Commercial Court of his/her place of domicile.
  • termination. Notice of withdrawal (Article L134-11, paragraph 3 of the Commercial Code) must be of 1 month for the first year, 2 months for the second year, 3 months thereafter.
  • goodwill indemnity: after termination of the contract, the agent is entitled to an indemnity for termination as compensation (Article L134-12 of the Commercial Code). It is a rule of public order, therefore, the clause that provides for an exemption of this entitlement will be considered null and non-existent. The agent has one year to assert this right to severance indemnity. The amount of the compensation is equal to two years of commissions (gross) received by the agent. This is to be seen as a maximum measure and it is up to the principal to prove the reason as to why the agent should be entitled to a lower compensation.

Also in this case we suggest to be advised by a French lawyer specialized in agency agreements in order to be compliant with the EU and French relevant laws.

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