AGAVE PRODUCERS IN MICHOACAN SEEK SPECIAL DENOMINATION OF ORIGIN CERTIFICATION FOR MEZCAL.

Agave cactus growers and manufacturers of the popular Mexican spirit mezcal in Michoacan state are pushing the Mexican patent office (Instituto Mexicano de Propiedad Industrial, IMPI) to complete the certification process that would provide them increased marketing opportunities for their product. If approved, the Michoacan mezcal industry would become part of an elite group of states and regions that have received the coveted denomination of origin certification. But the push for certification comes at a time when demand for mezcal is down significantly in the export market, especially in the US, which is Mexico's top customer.

The Union de Mezcaleros del Estado de Michoacan, with support from state economic-development officials, is the main group pressing for certification. The IMPI, which began the certification process in 1995, has awarded the denomination of origin designation to Guerrero, Durango, San Luis Potosi, and Zacatecas states and to 11 municipalities in Tamaulipas and one communal farm in Guanajuato.

Producers in Michoacan, who argue that their product is as good as those in the other areas that received certification, criticized the IMPI for taking so long with their petition, which was filed in November 2006. "It has been more than two years since we filed the petition, and we haven't heard either way," said the organization's president Jose Guadalupe Flores Toledo, who noted that the lack of certification is limiting production capabilities of agave producers.

Officials at the Consejo Mexicano de Productores de Maguey y Mezcal (COMMAC) agreed that the decision to begin certifying mezcal in the mid-1990s, with a process similar to one employed for tequila, tended to discourage production. "There was a demand for better quality," said COMMAC official Francisco Javier Perez Cruz.

Perez Cruz estimates that recent mescal production has been about 6 million liters annually, but a large share of that production occurs in small rural communities, where the spirit is intended for local consumption. Only 1 million liters of the total produced in 2007 received the denomination of origin. Roughly half of the certified product, about 500,000 liters, was shipped to the US.

Producers seek to market product beyond US

Perez Cruz and other officials said marketing and promotion remain a weakness of the mezcal industry, which generates about 29,000 direct and indirect jobs.

"The biggest problem for producers is the last stage of the process, which is commercialization," said former federal deputy Fernando Ulises Adame de Leon, who represented Durango state in the lower house.

Marketing has become an even greater challenge in the past couple of years with demand dropping significantly in the US, the largest export destination for mezcal.

"We have seen a decline in the consumption of mezcal in the US," said Roque Lopez Garcia, director of economic development in Oaxaca state, who anticipates a decline of 30% in sales north of the border. He noted that a high percentage of the mezcal exported to the US is shipped to Los Angeles, San Diego, and other parts of southern California, where the principal customers are Mexican immigrants.

Because of the slump in US demand, officials in the major producing states demanded that the federal government invest more resources in expanding sales in other regions of the world. They believe there are increased opportunities in some European, Asian, and African countries.

COMMAC president Rigoberto Acosta said marketing efforts can expand demand in 22 countries where the industry has made inroads, including Australia, New Zealand, Britain, France, Russia, Japan, China, Panama, and Chile.

Some officials say marketing opportunities are being lost because the Secretaria de Agricultura, Ganaderia, Desarrollo Rural, Pesca y Alimentacion (SAGARPA) has failed to spend funds allocated by Congress for promoting mezcal. "Promotion efforts have not begun because the money has not been spent," said Claudio Rosas, Oaxaca state economy secretary.

The mezcal industry needs to boost its exports to clear its large inventories of product, accumulated in recent years following a surge in the number of agave cactus plants that completed their maturation cycle in 2007 and 2008. This problem is similar to one facing the tequila industry, which uses a different variety of agave (see SourceMex, 2004-10-20).

Rather than allowing the cactus to go to waste, a large percentage of the mature plants were processed into mezcal. As a result, said Lopez Garcia, there are enough reserves in warehouses to meet current demand through 2014.

But some producers in Guerrero state face an additional challenge with the huge harvest--a lack of workers to gather the crop. "The more than 300 producers in Costa Grande and Tierra Caliente said they were unable to find enough laborers in December and January because many were already hired to harvest drug-related crops," said the Mexico City daily newspaper Milenio Diario. (Sources: The Chicago Tribune, 07/03/07; El Siglo de Torreon, 03/28/09; El Universal, 06/04/08, 07/12/09; Semanario sin Limites, 07/16/09; Rumbo de Mexico, 07/23/09; Puntual, 07/24/09; MiMorelia, 07/29/09; Notimex, 03/02/08, 07/22/09, 07/30/09)