Mezcal Regulatory Council Sanctioned, Fined by Mexican Government

Mexico's Secretariat of the Economy has sanctioned and fined the Mezcal Regulatory Council (CRM).

Mexico’s Secretariat of the Economy (SE) has sanctioned and fined the Mezcal Regulatory Council (CRM) for “deceptive, abusive” practices over the past three years. In two strongly worded June 30 rulings (oficios), the Director General de Normas painted a damning picture of the CRM’s behavior since 2017, and imposed total fines of nearly one million pesos ($45,000 USD). The rebukes conclude with a stern warning that repeated instances of the violations could result in the SE revoking the CRM’s mandate to certify mezcal.

The Denomination of Origin for Mezcal (DOM), like all Mexican DOs, is the intellectual property of the state. The federal government authorizes “certifying bodies” and “verifiers” to evaluate and certify DO products, in accordance with various Mexican Norms. The General Directorate of Norms, within the Secretariat of the Economy, is the ultimate authority on these matters, and is responsible for authorizing certifying bodies, verifiers, and laboratories. The CRM is the original certifying body and verifier of the DOM, and also operates a laboratory. While most of us habitually think of the CRM as the sole arbiter of all things mezcal, this government ruling is an explicit reminder of where that power ultimately lies.

In 2017, the government authorized the first non-CRM certifying body and a distinct verifier. The following year, it authorized two new certifying bodies (as reported in Mexico here and by Mezcalistas, in English, here). The rulings conclude that the CRM has “intentionally, repeatedly and unjustifiably” refused to recognize or work with these bodies in open contempt of a government order to do just that in January 2018. Further, the SE found that the CRM misled mezcal producers who wanted to certify with bodies in Michoacán, and induced them into contracts using the CRM’s own laboratory exclusively. The judgement goes so far as to nullify those contracts, freeing the producers to certify with other entities.

Mezcal: Not the CRM’s property

Mezcal Regulatory Council's sanctioned by Mexican government for "deceptive, abusive" PR campaign.

The oficios also conclude that the CRM’s “If It Doesn’t Have the Hologram of CRM, It Isn’t Mezcal!” publicity campaign is deceptive, abusive, and confusing to consumers. While the campaign was seen by most as targeting non-certified agave distillates, the SE focused on how the campaign harms consumers, producers, and the other certifying bodies by proliferating information that is “inexact, false, exaggerated, partial, artificial or biased.” The judgement explicitly reminds the CRM that the DOM belongs to the Mexican state, that the CRM “does NOT enjoy an exclusive or distinct right to use or refer to the DOM,” and that the state may and has authorized other certifying and verifying entities, which the CRM is legally bound to respect.

What’s the bottom line?

The fine imposed for the ‘hologram” violation ($260,640 pesos) was the minimum established by law. However, the SE imposed the maximum fine ($695,040 pesos) for the “particularly grave” harm done by “intentionally, repeatedly and unjustifiably” refusing to recognize other certifying bodies and verifiers, creating confusion among consumers, and impeding producers’ access to domestic and international markets.

The judgement ends with a stark reminder that, should the CRM be found in violation of these federal laws and norms again, the SE may revoke the CRM’s authority to certify mezcal entirely. The CRM has 15 business days to appeal the ruling.