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With the no and low alcohol sector gaining popularity, especially among millennials and Gen-Z consumers, the regulatory challenges for producers are increasing. Shannon Fahy, associate at Browne Jacobson, explains how low and no alcohol producers can position their offerings without incurring legal challenges and how to spin issues that arise into creative opportunities.

The no/low alcohol beverage industry is experiencing remarkable expansion, with UK sales showing a strong 17% increase in 2023 according to IWSR data. Similarly, Drinks Ireland reported an increase in sales of non-alcoholic beer by 18% in 2023. In light of this, the overall increase in sales of non-alcoholic beverages in Ireland can be expected to be much higher once other alternatives, such as those for wine, have been factored in. Consumer behaviour reflects these trends, with YouGov reporting that over one-third of UK adults now regularly choose no/low alcohol options, with similar statistics being seen in Ireland. This significant shift in consumer preference gives rise to substantial opportunities for drink manufacturers to expand their product offerings. However, the shift also brings with it a number of complex legal considerations that need to be carefully navigated.

Prosecco or No-secco? That is the question

One of the key legal concerns to keep in mind is with respect to intellectual property rights and the obligation placed on brand owners to respect Protected Designations of Origin (PDOs). PDOs, such as champagne, prosecco and port, enjoy strong legal protection in order to preserve the unique heritage and quality of their products, which is associated with their respective geographical regions.

A recent landmark case involving the 'PriSecco' trademark highlights the legal safeguards in place to protect PDOs and the impact these protections have on the no/low alcohol industry. The EU Intellectual Property Office's Fifth Board of Appeal upheld an invalidity decision against the 'PriSecco' mark, which had been registered to cover 'non-alcoholic cocktails whose ingredients are apple and or pear juices based on meadow fruit varieties'. The board held that the mark constituted an 'evocation' of the protected 'prosecco' designation, despite being an alcohol-free product. This decision stands as a precedent, showcasing the far-reaching implications of PDO protections even in the no/low alcohol market.

The challenge of creating distinctive branding while also appealing to consumers who are familiar with traditional wine products requires a delicate balance. Manufacturers should develop marketing strategies that communicate their product's benefits and characteristics without leveraging the reputation of protected wines. This often requires innovative approaches to product positioning and consumer targeting.

Marketing strategies for manufacturers

Manufacturers should strongly consider implementing a legal strategy to cover every stage of a product’s development and marketing. This proactive step can help ensure new products are legally compliant and thus help manufacturers to avoid unnecessary costs which may arise due to non-compliance (such as rebranding costs, legal fees, etc.).

Manufacturers should avoid not only direct name similarities, but also any visual, phonetic or conceptual connections to protected terms. Instead of engaging in wordplay when naming a brand, manufacturers should consider other sources of inspiration. The Shloer brand is a good example of this successful differentiation, having established its identity by reference to its inventor’s name, instead of a protected wine term. This approach demonstrates how manufacturers can build strong brands while respecting intellectual property rights, proving that success doesn't require association with traditional wine terminology.

Marketing materials should also be carefully evaluated to prevent unintended suggestions of association with protected wines. Even the inclusion of accompanying explanatory terms like 'type,' 'style,' or 'method' may not provide sufficient legal protection when referencing established wine varieties.

Manufacturers should strongly consider:

• Creating entirely original brand identities rather than modifying protected terms

• Implementing thorough trademark and PDO clearance processes

• Developing distinctive marketing approaches that clearly position products as alternatives

• Maintaining comprehensive documentation of brand development

• Staying up to date with evolving regulations and investing in legal expertise during early development stages

• Regularly reviewing and updating marketing materials to ensure ongoing compliance

An alcohol-free future

As the no/low alcohol sector continues its growth trajectory, manufacturers should expect increased scrutiny of their branding and marketing strategies from both regulatory bodies and traditional wine producers. The 'PriSecco' case serves as a reminder that non-alcoholic status doesn't exempt products from wine-related PDO regulations, and these manufacturers should remain vigilant when it comes to brand positioning.

The industry should prepare for potentially stricter PDO enforcement as traditional wine producers work to protect their heritage in an increasingly diverse beverage market. Early investment in legally compliant branding strategies will prove essential as regulatory oversight intensifies alongside market growth. Success will increasingly depend on the ability to create unique value propositions that don't rely on associations with protected wine categories.

Looking forward, manufacturers seeking to take advantage of this surge in consumer demand should view legal requirements as opportunities for creativity rather than obstacles. By prioritising compliance during product development, manufacturers can avoid costly rebranding and potential legal challenges while building sustainable brands. This approach allows companies to focus their resources on product innovation and market development rather than legal disputes.

As the market matures, manufacturers who have established strong, independent brand identities while maintaining strict legal compliance will be best positioned to capture the opportunities presented by evolving consumer preferences in the no/low alcohol beverage sector.