Tequila war ends with a toast

U.S. liquor bottlers who wanted Mexico to continue allowing them to import tequila in bulk for bottling later in the U.S. have gotten their way.

Mexican government officials in 2004 accused U.S. bottlers of adding lower-cost alcohol and selling the blend as "tequila." As a result, they threatened to require that the spirit be bottled in one of the five Mexican states -- Jalisco, Guanajuato, Nayarit, Michoacan and Tamaulipas -- that make up the tequila region and where the blue agave plant is grown to make tequila.

The Distilled Spirits Council of the United States (DISCUS) and other trade groups vociferously objected to the claim and the threatened prohibition, calling them a violation of the North American Free Trade Agreement. Their opposition is understandable since 73% of the $400 million worth of Mexican tequila imported in 2004 was shipped in bulk form.

The Mexican government issued a release on Jan. 17, saying a new agreement that guarantees the authenticity of tequila sold in the U.S. is proven by the creation of a registry that identifies approved U.S. bottlers.

Tequila has become a staple of the U.S. liquor market, particularly in such popular cocktails as margaritas. Sales volume in 2004 increased by 8.3% to $3.3 billion in retail sales, according to DISCUS.

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