Distribution of Wine in Slovenia

Slovenia is a traditional wine producer. As relatively small country (with the area of 20.271 km² and population of 2,1 million) Slovenia produces yearly between 800.000 hl and 900.000 hl of wine on app. 17.500 acres of vineyards. Vineyards are located at steep slopes which on the one hand makes the production of wine rather expensive while on the other hand enables production of high quality grapes. Consequently, the production of high-end wine presents 70% of the entire production. The Slovenian market is characterized by numerous smaller producers who are producing a high-quality (high-end) wine. White wines represent 68% of the total wine production in Slovenia.

Although the per capita consumption in Slovenia (with 35.7 litres per capita per year) is relatively high, the domestic consumption is decreasing. The volume of export increased through the past years. Slovenia exports mainly high-end wines. On the other hand, Slovenia imports mainly wines without protected designation of origin and lower-end wines, because there is a local shortage of such wines due to characteristics of Slovenian production and consumption.

As a result, the following factors can play in favour of foreign producers of medium or low-end wines: the average consumption of wine per capita is among the highest in the world (about 35.7 lt each) and domestic production of mid and low-end wines is insufficient considering the characteristics of local consumption.

In summary: not a big market, but a market characterized by big consumption with a shortage of domestic wine of lower quality. On the other hand, high-end wines are highly appreciated amongst certain population niches who are willing to pay for the high quality, which offers oppor-tunity also for high-end wine producers. All the above mentioned may offer different chances for producers having a clear distribution strategy.

Trademark protection is very relevant not only to not only to prevent third parties from using the trademark in the country where the producer is located, but also to prevent the foreign distributor from facing claims by third parties who may have fraudulently registered the mark in that specific market.

Choosing the right scope of protection for a trademark is essential and strongly depends on the target market. Trademark protection is open to three viable options: registration of (i) an EU trademark (protected via OHIM as a community trademark (CTM)), (ii) an international trademark (application filed with WIPO under Madrid Agreement and Madrid Protocol in which Slovenia is a party too) or (iii) a national trademark. An EU trademark offers certain advantages (see here in detail), yet business activities that focus on a few countries only, might benefit from tailored registrations of a national trademarks. When registering a trademark in one of the Member States it is, first of all, opportune to ask whether it is better to register an EU trademark, which with a single application, guarantees a quite fast and cheap protection in all Member States.

The application for registration of Slovenian trademark  shall be filed at the Slovenian Intellectual Property Office (SIPO) which is an autonomous body within the Ministry of Economic Development and Technology. Registration lasts 10 years and costs as follows: filing fee EUR 100 for up to 3 classes (plus EUR 20 for each additional class) and registration fee for up to 3 classes: EUR 150 (plus EUR 50 for each additional class). Application filed by a foreign entity must be filed through trademark agent registered with SIPO. The registration is valid for 10 years and can be renewed every subsequent 10 years upon payment of the EUR 150 of renewal fee.

It is strongly recommended to always check before filing the application to see if the same or a similar trademark has already been applied for or registered in respect of Slovenia. SIPO does not perform an ex officio examination as to earlier rights (relative grounds for refusal) but its Information Department can search on the prospective applicant’s behalf for identical and similar trademarks. SIPO also offers a free research platform the Database Server on the SIPO's website.

Before entering the market, in addition to registering the trademark, it is advisable to register your domain name, in order to prevent third parties from fraudulently stealing the domain name (so called “cyber-squatting”) and, consequently, preventing you from using it.

The labelling of wines sold on the Slovenian market is governed by the EU legislation (already seen in the specific EU Guide) which in Slovenia has been implemented and applied by the provisions of the Wine Act and the Rules on the labelling and packaging of wine.

A specific requirement under the Slovenian law (which is not envisaged under the EU legislation) is that the classification by quality class shall be specified on the label (e.g. wine, sparkling wine, quality wine, quality sparkling wine, wine of superior quality, superior quality sparkling wine) except from wines with no indication of vine variety and wines with no protected designation of origin or no geographical indication. Slovenian law also requires that each Slovenian wine (from the class of quality wines with the protected designation of origin, local wines with a recognized geographical indication and wines with the designation of vine variety) shall, prior to being put on the market, be subject to appraisal procedure conducted by authorized appraisal organization.

Mandatory information on the label (to be in Slovenian language): category of grapevine product, product type name of the product, alcohol content (vol %), nominal volume (l, ml, cl), sugar content (only mandatory for sparkling wine and aerated sparkling wine), origin, an indication of the bottler for still wine and of the producer for sparkling wine, indication of traditional term for wines with the Protected Designation of Origin, or Protected Geographical Indication, name of geographical indication, serial number, name of importer for imported wines, allergenic ingredients (sulphites, milch or egg proteins), appraisal decision number (where applicable).

In addition to the above requirements, additional information may be indicated, such as geographical data (area), year of vintage, vine variety, additional statements for wines with protected geographical indication or designation of origin, wine colour, images of the protected designation of origin area (DPO) or of the protected geographical indication, indication of certain type of production, additional (traditional) indications (name of cellar, farm, winery,..), harvesting year, EU quality schemes symbols (into which the product is integrated) etc. Any misleading content is prohibited.

Slovenia is a part of the European Customs Union, therefore import procedures from non EU countries follow EU rules, while wines from other EU states (or already cleared in any other EU state) are free to enter the Slovenian market without additional customs controls.

Customs duties are calculated at European level. Please refer to the EU section.

Excise duty: According to the Slovenian Excise Duty Act, the excise duty taxable base shall be EUR 0 for one hectolitre of still wine and EUR 0 for one hectolitre of sparkling wine.

Value Added Tax (VAT): in Slovenia amounts to 22%.

Slovenian law (Act Regulating the Sanitary Suitability of Foodstuff, Products and Materials Coming into Contact with Foodstuffs) prohibits advertising of alcoholic drinks with more than 15% alcohol content (vol %). As regards advertising other alcoholic beverages, several legal restrictions apply, such as for example: prohibition of advertisements beside roads (on billboards and similar); prohibition of advertisements in health, nursery, sports and educational institutions and kindergartens and within certain areas around them; prohibition of TV and radio advertisements between 7 a.m. and 9:30 p.m.,etc. Additional restrictions also apply with respect to the content of advertisements, such as for example: the advertisement shall not encourage excessive and uncontrolled use of alcohol; advertisement shall not be addressed to minors and shall not show persons consuming alcohol; advertisement shall not show persons under the age of 25, shall not suggest or give impression that consummation of alcohol increases the physical capacity/efficiency, improves driving skills or attributes to success in social or sexual life; advertisement shall nor represent sobriety and abstention from alcohol consumption as negative values; each advertisement shall include a warning prescribed by law.

Slovenia has a dual system for regulating the advertisement of alcoholic beverages in place, consisting of legal restrictions (specified in the previous paragraph) on the one hand and self imposed restrictions on the other hand. As regards the self imposed restrictions, they are regulated under the Slovenian Code of Advertising Practice adopted by the Slovenian Chamber of Advertising (“SCA”). A large segment of expanded content, takes into account provisions of the International Code of Advertising Practice. The SCA is a member of European Advertising Standards Alliance (EASA) and International Advertising Association (IAA).

Moreover, in Slovenia there is an absolute ban on the supply and sale of alcohol to minors under the age of 18 years and to other persons who are reasonably believed to be purchasing the alcohol beverages with the purpose to give them to minors. Furthermore, the shops and bars/restaurants have limits on the sale and administration of alcohol (prohibition of sales from 9 p.m. (exception applies to bars/restaurants) to 7 a.m.). It is not permitted to sell alcohol in automatic self service machines.

Wine trade is a non-restricted business in Slovenia and hence meeting general condition for trading business is sufficient. Supermarkets and grocery stores are also permitted to trade wine and spirits. It shall however be noted that the shipments of wine shall be accompanied by documents prescribed by law, at transportation.

The distribution of wine and spirits take place through different commercial agreements, of which (framework) sales agreements, distribution and agency agreements are most common. It is not required under the Slovenian law for the above cooperation models to be agreed in writing. However, it is strongly recommended that the cooperation model is clearly defined with a written contract which provides the respective obligations of the parties. The parties should ensure that the signed contract is complete and satisfactory.

As regards the sales agreement, the provision of the United Nations Convention on Contracts for the International Sale of Goods would apply with respect to the sales (unless its application is explicitly excluded in the agreement executed between the parties).

As regards the cooperation under the distribution agreement, it shall be noted that as in almost all European countries, in Slovenia the distribution contract is an atypical contract, without a specific regulation under the laws, therefore, governed by applying rules dictated for similar contracts (taking into consideration all the specifics of particular contractual relationship). For this reason it is essential to negotiate and draft the distribution contract in a exhaustive way, correctly balancing the interests of the two parties and to settle all aspects of the relationship. For further details regarding the distribution agreement under the Slovenian law, we refer to the Slovenian part of the Distribution Guide.

Agency agreement is specifically regulated under the Slovenian Obligations Code (OZ). The provisions of the OZ implement the relevant provisions of the Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents (“EU Agency Directive”) into Slovenian law. For further details regarding the agency agreement under the Slovenian law, we refer to the Slovenian part of the Agency Guide.

As regards the online sales, we refer to the EU part of this Guide with respect to any considerations regarding the antitrust limits to the online resale of products.

We recommend to take also the following issues into account when negotiation and drafting an agreement with respect to Slovenia:

• ave a clear and precise business model and, consequently, clearly define the fundamental aspects of the agreement (territory, duration, product list, transfer of title, risks etc.);
• keep in mind that the current anti-trust EU legislation prohibits various clauses (e.g.: fixing of the resale price by the producer; general prohibition of resale online; prohibition of resale to consumers from other states) that are deemed harmful to EU competition, because they excessively restrict the buyer's freedom of enterprise;
• further, e-commerce is gaining market share in Slovenia: it is good, therefore, to have a clear idea of how to structure the online sales and regulate them accordingly;
• term & termination. Stipulate the term (if applicable), the conditions, the notice period and the form of the termination notice, the reasons for early termination and exit / transition scenarios, as well as the rights and duties of the parties at termination of the contractual relationship. Countercheck such stipulations with the applicable law, as mandatory rules may apply, e.g. minimum notice periods, especially for commercial agents, but also for distributors;
• consider the financial consequences in case of termination. At termination, you may – mandatorily – have to pay an indemnity in return for the substantial benefits derived from the customers brought by the sales intermediary. Indemnity is mandatory for commercial agents;
• applicable law and jurisdiction. In principle, the parties are at the selection of the governing law of their relationship and the choice of law clauses are in principle fully recognized by Slovenian courts. The courts of Slovenia would refuse to recognize the choice of law clauses only in limited cases/for limited reasons. Disputes arising from the agreement concluded between the Parties may be submitted to a foreign jurisdiction or to a foreign arbitration in the event the parties have chosen such a venue for dispute resolution. The judgments of the courts of any other Member State are automatically recognized and enforced in Slovenia under the EU Regulation 1215/2012 rules (same applies to the recognition and enforcement of judgement issued by Slovenian courts in any other Member States). The arbitration remains a valid alternative, especially in contracts of high value and when there is a need for confidentiality over any dispute; since Slovenia is a member of the 1958 New York Convention, foreign arbitration awards are immediately recognized, all subject to terms and conditions of the New York Convention.