How EU Regulation Deals With Blue Wine

A Spanish startup’s new wine is made with red and white grapes from European vineyards. Low in alcohol, the wine has no added sugar. But because it contains grape skin pigment and some indigo, the wine is blue.

And that is the problem.

EU regulators say wine cannot be blue.

What’s Wrong With Blue Wine?

Blue wine producer Gik was fined for violating EU regulations. No, blue wine is not prohibited. You just cannot call it wine.

Defending the fine, the Spanish Wine Federation said blue wine wasn’t listed among the EU’s 17 wine product categories. Those categories protect consumers and businesses. They prevent fraud, preserve quality…and perpetuate the status quo.

So Gik tweaked their ingredients and their label. Adding 1% grape must, they entered the “other alcoholic beverages” category.

They also are circulating a petition. Urging progress, they said that the European wine industry had been constrained by tradition for centuries. Now it was time for some fun.

Our Bottom Line: Innovation

EU regulations stifle innovation. Their supporters say they guarantee quality and consistency. The tradeoff though is productivity and economic growth.

Proponents of less regulation hope for more creative destruction. Close to 70 years ago, economist Joseph Schumpeter said creative destruction was a painful process. As new industries replaced dying enterprises, jobs would be lost. But the result is technological progress that fuels economic growth.

Maybe not the kind of technology imagined by Schumpeter, blue wine could lead to creative destruction.

My sources and more: Yesterday’s walk was a pleasure because of an Econtalk podcast on Europe. Together, the podcast and two articles, here and here, conveyed the blue wine story. I also recommend taking a look at the Gik petition and a brief Schumpeter bio.