Three million euros for abandoning ‘Armenian cognac’ production – Out of Sight

“In Armenia, cognac cannot be produced, just as ‘Jermuk’ cannot be produced in the city of Dilijan,” said Armenian Prime Minister Nikol Pashinyan at a government session.

On June 10, 2021, the Armenian government approved an agreement between Armenia and the European Union, the purpose of which was to promote the “smooth and effective cessation” of the use of the term “cognac” for alcoholic beverages produced in Armenia. To implement this agreement, the EU plans to allocate Armenia three million euros.

The term “Armenian cognac” will soon be heard only at home—around the kitchen table, at family gatherings—but on the bottle label instead of the word “cognac” there will be another name, for example, “brandy.”

Back in 2017—after the signing of the Comprehensive and Enhanced Partnership Agreement between Armenia and the EU—Yerevan undertook the obligation not to use the trademark “cognac.” At that time, however, these obligations applied exclusively to exports to EU member states. Yet in 20 years Armenia will no longer be able to use the trademark “cognac” even on the domestic market.

Industry experts told Alpha News that the government could still adopt alternative measures to circumvent the ban.

Specialists in the field are currently searching for a new name for Armenian cognac. Already well-known on the global market, Armenian cognac now faces the challenge of re-entering the market almost from scratch and once again becoming recognizable and popular.

Meanwhile, competitor countries—for example, Georgia—will further strengthen their positions in the market, since Tbilisi has no obligations regarding the use of the “cognac” term.

Can Armenian-French relations help restore the right to use the “cognac” designation, and what economic consequences might the name change bring for producers?

Alpha News discussed these issues with industry experts.