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Not just any whisky can call itself a scotch, according to UK law the spirit must have matured in Scotland for a minimum of three years for it to be allowed to call itself scotch. However, for a long time no such distinction existed in other countries, this allowed for scotch counterfeiters to be able to use the word scotch to promote whiskies that had nothing to do with Scotland. This is why it is important for the UK government and Scotch Whisky Association (SWA) to encourage countries to recognize that the term Scotch denotes a very specific product and a mark of quality.
This is what a Geographical Indication (GI) is, a special form of intellectual property rights. GIs can be applied to products that have a specific reputation and characteristics which stem from their place of origin. This is why a sparkling wine cannot call itself Champagne unless it was made in the Champagne region of France or feta cheese only coming from Greece. Scotch is a recognized GI across the entirety of the EU, even after Brexit, with many countries outside of the EU such as Canada still upholding the pre-existing GI qualification of scotch anyway.
This means that across much of the world, the high quality of scotch is legally protected meaning that counterfeiters and those looking to pass off their spirits as scotch face legal challenges. For scotch investors, GIs mean that international consumer demand for their scotch is not undercut by knock off products, protecting their eventual returns. This is why scotch makes such a powerful investment due to this heavy level of international recognition.
This is why you frequently see whisky distillers outside Scotland embroiled in legal battles when they use names that evoke a Scottish heritage. In a recent case a German whisky was ordered by courts to remove the word ‘Glen’ from its name, because it did not have anything to do with Scotland. The courts ruled that the use of the Gaelic word Glen, would confuse consumers into believing that they were drinking authentic scotch.
Not all countries at present recognise scotch as a GI however, and the SWA has been fighting to ensure that the term scotch is applicable globally, to great success. In the past few years, victories have been achieved in Laos, Cambodia, New Zealand, South Africa and the vast Chinese market with many more nations in the pipeline.
Overall this is one of the strengths of scotch cask investing, the fact that scotch is an internationally recognised and protected product. It guarantees the prestige and high quality of scotch and ensures consumers are not misled into buying products that are trading off of the good name.
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