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Friday, July 19, 2024 | Back issues
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Italian-German Wine War in California

LOS ANGELES (CN) - An Italian winery claims in Federal Court that a German wine distributor is relabeling and selling its wine on California's "gray market."

Santa Margherita S.p.A. sued Unger Weine KG on copyright and trademark claims.

Santa Margherita says that Terlato Wines is the authorized distributor of its pinot grigios - Valdadige DOC and Alto Adige DOC - in the U.S. market. It claims that Unger Weine undercuts its sales by exporting and selling the wine to Thomas Imports of Pasadena.

Neither Terlato, of Lake Bluff, Ill., nor Thomas Imports are parties to the complaint.

"Gray market Santa Margherita wine is materially different from authorized Santa Margherita wine in several respects," the complaint states. "The wines have different numbers of labels, different content in the text of the labels, different style of borders and design drawings on the labels, different font style in certain words on the labels and different colors of labels and foil tops, among other things. In addition, Santa Margherita and its exclusive distributor Terlato Wines maintain a closely monitored exclusive distribution network for authorized Santa Margherita wine designed to ensure quality control for the wine and the distribution of the wine. Gray market Santa Margherita wine is sold and distributed outside this authorized distribution channel and is not subject to the same quality control standards as authorized Santa Margherita wine."

Santa Margherita claims Unger Weine's copyright and trademark infringement will confuse wine buyers.

"U.S. purchasers and consumers have come to expect a certain quality, packaging, appearance, and overall image of authorized Santa Margherita wine as a result of plaintiff's extensive branding, marketing, sales, and quality control efforts in the United States," the complaint states.

Santa Margherita says it trademarked its wine in 1956, and first used the mark in the U.S. market in 1983. Sales of Santa Margherita wines are roughly $70 million a year and it spends $10 million promoting its wine nationwide, the complaint states.

Santa Margherita is represented by Charles Clark of Pasadena. It seeks damages for trademark and copyright infringement, unfair competition and deceptive trade.

Clark and Donald Dinan of Roetzel and Andress in Washington, D.C., described themselves as "crusaders" for wine consumers in a joint statement.

"Santa Margherita is an exceptional and well known wine, and the consumer is ripped off by this gray market product by the way it's packaged and handled," they said.

Unger Weine did not immediately respond to an emailed request for an interview.

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