Brazil: Bad Booze News In Bottle Battle

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“Not just a brand, a symbol of Brazil.” “Hey, Neuza, you ever heard of Oncinha brand pinga?” “Uh, no.”

The Correio Forense (Brazil) bears gloomy tidings for thirsty denizens of low dives and roadhouses nationwide. Our intellectual property, antitrust litigation and “ratfink business competition strategy” story of the week.

Todas as garrafas da Cachaça 51 deverão ser recolhidas do mercado. É o que determina a juíza Lélia Aparecida Toledo Azevedo, de Santa Rita do Passaquatro (SP), que rejeitou recurso da Companhia Müller de Bebidas, fabricante da 51, produto líder. A empresa tentava reverter sentença estabelecendo o recolhimento das garrafas ou multa diária de 100 salários mínimos (R$ 38 mil), que hoje, segundo a concorrente Caninha Oncinha, já somaria R$ 48 milhões.

All bottles of “51” brand cachaça must be taken off the the market. That was the ruling of Judge Toledo Azevedo of Santa Rita do Passaquatro in São Paulo, who rejected an appeal from the Müller Beverage Co., maker of the market-leading 51. The company was trying to reverse a ruling that ordered the recall, on pain of a daily fine of 100 minimum salaries ($38,000), which according to competitor Caminha Oncinha would amount by now to some R$48 million.

Also known as Pirassununga 51, after the city in the interior where the firm was founded.

Müller has one of those Web sites in which you have to enter your birthdate in order to certify that you are old enough to access the alcohol-related content within.

Missiato, located in Santa Rita do Passaquatro — population 27,627 — seems to be the purveyor of a brand known as “61.”

It is hard to know: It has a Flash-driven Web site that does not yield any information in my browser.

A Oncinha e outra fabricante de aguardente, a Missiato, alegam que a impressão em relevo na garrafa da 51 faz com que as demais fabricantes sejam prejudicadas. Isso porque só podem usar o vasilhame liso — as garrafas são reaproveitadas e o relevo atrapalha a produção das outras empresas. A briga judicial foi reiniciada em 2000, porque a 51 teria descumprido acordo judicial, firmado em 1995, com o compromisso de não mais fabricar litros com a logomarca em relevo.

Oncinha and another aguardente [“firewater”] manufacturer, Missiato, alleged that the bottle design, which features [the 51 logo] molded in relief, harms the company’s competitors. This because only smooth bottles are permitted — the bottles are reused, and the embedded relief  interferes with the production of other companies. The legal battle began in 2000 when 51 allegedly failed to comply with the terms of a 1995 settlement in which it promised not to manufacture any more liter bottles with its logo stamped in relief on the bottle.

A nova ação ocorreu quando as concorrentes perceberam que começaram a reaparecer litros com relevo. Além disso, havia a suspeita de que funcionários da Müller, segundo o advogado da Oncinha, Carlos Ferraz, haviam feito pedido de registro de patente da garrafa no Instituto Nacional de Propriedade Industrial (INPI).

The new lawsuit arose when the competitors observed that liter bottles with this feature had reappeared. Furthermore, there was the suspicion that Müller employees, according to Oncinha lawyer Carlos Ferraz, had applied for a patent on the bottle design with the National Institute of Industrial Property (INPI).

A discussão começou quando as concorrentes entraram com representação no Conselho Administrativo de Defesa Econômica (Cade) pedindo que fosse avaliada prática de concorrência desleal. “Em 1989, o Cade julgou a representação improcedente. Por isso, a Oncinha e a Missiato foram à Justiça”, lembra Ferraz. Ainda cabe recurso da decisão, mas, segundo o advogado, só uma apelação ao Tribunal de Justiça de São Paulo (TJ-SP), com pedido de liminar, suspenderia o recolhimento das garrafas do mercado.

The controversy began when competitors complained to CADE, the antitrust agency, asking that the practice be considered a case of unfair competition. “In 1989, CADE ruled the complaint was without merit. For that reason, Oncinha and Missiato went to court,” Ferraz recalls. The decision can still be appealed, but, according to the attorney, only an appeal to the São Paulo [state supreme court], with a petition for a stay, can prevent the product from being removed from the shelves.

At least the stuff has not been found to make you blind.

Not literally, not from drinking a single standard serving, at least.

I was read about an astonishing corruption scheme the other day in which bus companies were bribing federal highway patrol officers and highway inspectors to help them ratfink their competitors.

One technique they used was to get drugs and guns from police evidence lockers, load them onto rival bus lines using fake passenger bookings, then have those buses pulled over by cops, upon which their operators are fined huge amounts by the inspectors.

To add insult to injury, they would then deploy a “moral panic” campaign, pointing to their rivals for public contracts as the bus line of choice for drug-running scum.

The Correio Forense has not bothered to hear from the other side of the case — or at least to register an attempt to get comment from the other side of the case.

Neuza and I always have to laugh when we go into a liquor store in New York and ask if they have cachaça.

They generally do: Either 51 or Pitú, at $16 a bottle.

In Brazil, this stuff is almost cheap enough to run your car on, or used to be.

One day, the liquor store clerk on Seventh Avenue in Park Slope apologized to us because the store was “out of the good stuff”: referring to 51.

We had to snicker a bit at that.

Mind you, it is a perfectly serviceable brand of white lightning, and is served in quite a few of your finer restaurants.

We were laughing again the other day, for example, when a waitress at a chic spot on the Av. Paulista brightly informed us, when we asked what cachaças they had on hand, “Oh, we work exclusively with 51.”

The 51 brand being really the antithesis of all that might be branded or marketed as “exclusive.”

It has got to be one of the most “inclusive” forms of booze we know of.

A very serviceable and attractively packaged “double-distilled” brand called Sagatiba is on the market now, and reportedly slated for export. An aged version of it, marketing materials inform us, actually tied with 12 year-old Laphroaig in a blind taste test somewhere sometime recently. (I am a big Laphroaig fan.)

That is to say, when you buy the stuff in the supermarket — or, astonishingly, in gas station convenience stores — the bottles you buy almost always seem to be labeled “for export only.”

I am not sure exactly how that works.

I have yet to see it in U.S. stores myself.

But we are snobs, and also good friends of Alfredo the Barman, a (self-)acknowledged international grandmaster of the caipirinha.

So we tend to “work exclusively” with obscure cachaça labels from Minas and Bahia. Espirito de Minas tends to function as our Laphroaig or Oban, if you will.

Much as a Brazilians, for lack of access to imported product, think whisky begins and ends with the Two Gentlemen, Johnny Walker and Jack Daniels, the gringo cachaça neophyte might be tempted to think that 51 is the name of the game.

But in fact, cachaça is a vast, amorphous universe of regional variants and recipes, enough for many, many lifetimes of idle conversation — not unlike the endless disputes among aficionados of your Islay and your Spayside and your Highlands and your Coastal Highlands and the now nearly defunct Campbelltown varieties of Scotch whisky, single-malt and blended and what not.

On our recent expedition to the coast, for example, we sampled another great and mostly unknown pleasure, which is oak-aged cachaça that is locally produced and not industrialized at all, cooked up back in the sertão. Known locally only as the pinga do engenho.

Moonshine, not to put too fine a point on it, though without the high drama of revenuers pursuing the Dukes of Hazzard Pindamonhangaba through the hills. Fast cars, fast women. Nothing like that. Just a thin line of smoke from the slow fire under the copper kettle of the alambique, rising up from the thick mata.

In this case, we are talking really, really good moonshine, too.

I like mine with maracujá.

So what to do if the 51 runs out?

We tend to buy Hypioca or Velho Barreiro (“Old Mudmaker”) for purely medicinal purposes, in any event, so we are not too worried.

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“We will see your 51 and raise you 10.”


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