Australian prosecco boom threatened by naming dispute under EU FTA

The Dal Zotto family can't keep up with demand for prosecco at the moment.

"It's that popular at the moment there is not enough available in the market," says Michael Dal Zotto.

He's seen 50 per cent growth in the category with $40 million dollars' worth of prosecco sold from Australia last year and the sector on track for $60 million this year.

But growing demand for Australian prosecco could be stymied if Italian growers get their way in a bid to limit the use of the word prosecco as part of Australia's upcoming Free Trade Agreement negotiation with the European Union.

Australia's first commercial prosecco

Michael's father, Otto Dal Zotto planted the first prosecco variety commercially in Australia 18 years ago.

"At that time there were a handful of Italian proseccos in Australia and they were not widely consumed," says Michael. "When we released it, we spent most of our time explaining to people what it was and where it came from."

There's no need to explain prosecco anymore with prosecco production accounting for 50 per cent of the Dal Zotto business last year with 40,000 cases distributed across Australia.

The Dal Zottos plan to increase production by 30 per cent in 2018, and 15 per cent each year after that.

"As a small business its hard to balance the ability to grow with the demand for your product sometimes you are always chasing your tail," says Michael.

Michael and his brother Christian Dal Zotto have just bought the King Valley-based business off their parents, ensuring the business of prosecco is kept in the family.

Christian says prosecco has a broad appeal as a light, fresh easy drinking sparkling wine.

"You don't drink it like champagne you don't critique it, you literally enjoy the moment," says Christian. "It's a bit lower in alcohol and lighter in calories as well which is a bit of a bonus. It's affordable luxury."

Dal Zotto employs 30 staff and turns over $4 million a year but the brothers say the success of their business and the region is in the balance.

"When we planted Australia's first commercial vineyard of prosecco we bought a variety of prosecco," says Michael. "In 2009 prosecco's name was changed to 'glera' and a geographic indicator was created called prosecco. It was a little bit cheeky."

Australian prosecco growers challenged the finding and won but the use of the name prosecco is still an issue.

"Now with the Free Trade Agreement coming up Italians have put it on the agenda," says Michael. "We have been lobbying both sides of politics just so the politicians are aware of what is going on. We are not anti free trade but we want people to be aware of what's happening."

Australian prosecco makers argue prosecco is a globally recognised grape variety and that this would be akin to losing the right to use the term chardonnay or sauvignon blanc.

The Prosecco Road

The Dal Zotto's are part of a prosecco growers group called the Prosecco Road which markets prosecco but has now stepped in to a lobbying role as well.

Prosecco Road members including Michael Dal Zotto headed to Canberra last month to meet with parliamentarians and the group will continue to lobby ahead of the negotiations with the European Union.

Tony Battaglene, chief executive of the Winemakers' Federation of Australia, said the industry was looking to work cooperatively with Australian government trade negotiators to develop a strategic approach to the negotiations that would allow Australian prosecco to trade throughout the world.

"We need the government and opposition representatives to understand that there are real jobs and investment at stake. In the past, free trade agreements have delivered significant benefits to the Australian wine industry, and we are strong supporters of these agreements. However, the right to use prosecco is key to the Australian wine sector's future success."

A significant issue

Pizzini Wines is also a Prosecco Road member and chief executive Carlo Pizzini says prosecco is the most important product in Pizzini's portfolio.

"Like the Dal Zottos we are a family business, Mum and Dad started the business, they were tobacco farmers and we started growing grapes for local wineries and then commenced making our own lines in the early '90s," Pizzini says.

"Our volume is largely dominated by the Italian varieties for us the topic of prosecco and naming Italian varieties is an issue for us and King Valley in general and the reputation we have for them," says Pizzini. "We have developed a solid niche market for ourselves. It would be a significant issue for us if they were to change anything."

Pizzini Wines employs 35 staff and turns over more than $6 million a year.

"Our growth in prosecco alone has been 40 per cent year on year for the last four years," says Pizzini. "It's really kicked off the last few years. The forecast for growth has been significant. We are seeing growth in visitation into the area as well a lot of that is driven by prosecco. It does benefit the wineries and anyone who has a food and wine offering."

Pizzini says any changes to the classification of prosecco will hit the Australian industry.

"It doesn't stop you from selling the wine but it limits the marketability of the wine," says Pizzini. "People in Australia know wines by variety while as in Europe it is also sold by region. So it's more challenging to market the products here."