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Small New Zealand Winery Loses Battle With U.S. Giant

Kosher producer Baron Herzog charges that new Herzog label causes confusion

Eric Arnold
Posted: November 16, 2006

It's tough being a small winery. It's even tougher when you share a name with a big, established brand. Herzog, a small producer in Marlborough, New Zealand, has been forced to change the name on its labels due to the long-held registration of the Herzog name by U.S.-based kosher producer Royal Wine Corp., which owns the Baron Herzog winery in Oxnard, Calif. It's a blow to the New Zealand winery, which was just beginning to establish a presence in the U.S. market.

Both companies have history on their side. Baron Herzog was founded by Eugene Herzog, a Slovakian winemaker who emigrated after World War II and took over a small New York City winery in 1958. The company grew and expanded to California in 1985, and its Herzog Reserve and Special Edition bottlings are now among the highest quality kosher wines in the United States.

The family of Hans Herzog, who co-owns the Marlborough winery with his wife, Therese, has a history of making wine in his native Switzerland under the Herzog name since the mid-1800s. But the name's use in New Zealand is new. "We filed our name with the U.S. Patent Office in mid-2004, and were informed in March [2005] of a potential opposer. And May 19, 2005, a letter was sent on behalf of Royal Wine Corporation, from their legal team," said Therese. "Never have we experienced that our wines were mistaken as kosher wines."

Rarely are the wines mistaken for any others in Marlborough, either. The Herzogs moved to New Zealand in the late-1990s and purchased a 20-acre apple orchard near the Wairau River. They opened a Wine Spectator Best of Award of Excellence-winning restaurant on the property and, unlike their neighbors, they produce no Sauvignon Blanc. Instead the Herzogs planted Chardonnay, Viognier, Montepulciano, Pinot Noir and Pinot Gris. They also make a Bordeaux blend called Spirit of Marlborough. In total, the winery produces about 3,000 cases a year, with all of the wines selling at a relatively high price point--$40 and up for recent releases--compared to other Marlborough producers.

Royal contends that its regular customers let them know about the confusion. "They thought it was a mistake on our part, and then we explained to them that this is a different company," said Martin Davidson, director of communications for Royal.

"The kosher thing makes it doubly difficult," said Davidson of Royal's desire for clarity, "because if a consumer purchases a product believing it to be kosher wine ... and he's led astray by a name that's very similar, there's an additional problem."

After Royal's legal team contacted the Herzogs in New Zealand, Therese said that she and Hans wrote a letter to the CEO of Royal, offering to resolve the matter personally.

Davidson said that Royal would have liked to keep the lawyers out of the discussion, but that the Herzogs should have extended the olive branch before shipping their wines to the United States. "We certainly would have welcomed that smile and handshake, and we would have reciprocated had that been done before they had done any damage to us," said Davidson.

Herzog's U.S distributor, which sold only a few hundred cases a year of the New Zealand wines, put new labels, bearing the brand name Mahara, over the original ones and sold through its stock. Now, Therese said, "We don't send any wine to what we considered was one of our most important export markets." If there are any future shipments of the wine to the United States and Europe, the brand will be simply called Hans. "They won't allow us to use Hans Herzog in any form on the label for our export markets," explained Therese.

However, the Herzogs hope to retain use of the Herzog name in Australia and New Zealand. "We are fighting for this as this is the physical home of the winery," Therese said.

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