The Controversy Over ‘Karas’—A Term for Commerce or Cultural Heritage?

For many villagers across Armenia, karases—the egg-shaped terracotta jugs used for winemaking in the region—aren’t worth the basement space they occupy. Despite the fact that in recent years, they have become a symbol of ancient civilization in the region and a testament to Armenia’s viticultural significance (giving it an edge over its friendly rival, Georgia), karases as an instrument have fallen farther and farther into a well of obscurity.

In fact, today, the word is more likely to reference a brand than an ancient vessel. And where culture and commerce meet, there are sure to be complications—even, paradoxically, in the very industry karases exist to serve.

Karas Wine’s Red Wine (Photo: bettyswinemusings.com)

Karas Wines is one of Armenia’s largest contemporary wineries, launched nearly a decade ago as the wine branch of Tierras de Armenia CJSC. Tierras de Armenia was formed six years prior by Argentinian-Armenian entrepreneur Eduardo Eurnekian, as the agricultural tendril of a series of strategic investments. Eurnekian, who also owns the main postal office, a bank, and the country’s airport, and has contributed significantly to the Armenia’s economy saw it as a way to impact change on what he considered one of the the country’s most important sectors.

Up to that point, the alcohol industry in Armenia had mimicked what it was in Soviet years, where Armenia had been designated as the brandy-producing arm of the U.S.S.R. Tierras de Armenia had begun its operations with that in mind, growing grapes for the purpose of making cognac. But upon witnessing the high caliber of grapes they were growing, they quickly shifted to winemaking. After all, just one great wine could transform the market.

“We started our work in Armenian winemaking when practically no good quality wines were produced in the country,” says Juliana Del Aguila, Eurnekian’s niece and Director of Karas’ Operations, “No one really knew about quality winemaking (even being the first country in the world where wine was produced more than 6,000 years ago), no one even knew what the word ‘karas’ meant!”

The romantic story about Armenia as the birthplace of wine plays a big role in Karas Wines’ marketing—as their copywriter for a brief period in 2017, I would know. But it is modernity that forms the key ingredient to their success. They utilize contemporary viticultural expertise and state-of-the-art technology in all stages of their process, and their wines are fermented in stainless steel vats, not the old, clay karas, as their name suggests. The company’s relationship to the ancient vessel is purely an abstract one.

Karas Wines’ operations, located in Armavir, where their wines are fermented in modern, stainless steel tanks. (Photo: Karas Wines)

Del Aguila explains that the reference was never meant to be literal. “With the name ‘Karas,’ we aimed to revive this tradition and tell about winemaking and how it started, in the land that we love and care for and that has so much story to tell to the world,” she says, “We have worked a lot under this brand and name that represents us and Armenia.”

Tierras de Armenia filed a trademark with the Intellectual Property Agency (IPA) on the word “Karas,” which was granted to them on Sept. 17, 2011, and officially registered on June 6, 2012, under the serial number 18470.

Around the same time Karas Wines was getting on its feet, another winery was operating in a similar vein, founded by Zorik Gharibian, an Armenian diasporan who had built his former success in the Italian fashion industry. Always a wine lover, Gharibian and his wife, Yeraz Tomassian, had dreamt for many years of opening their own winery. Up until that point, they had been working in Armenia through the fashion industry, bringing manufacturing to the region. But by 2000, they decided to pursue that dream in Armenia. Thus began Zorah Wines.

Zorah Wines’ label for their wine “Զ Karasì Zorah” (Photo: Hetq)

From the start, it was a small, very niche operation. And though the Gharibians have secured modern equipment for their production, the ancient vessel, karas, also plays an important role. Gharibian has tried to bring back wine heritage in Armenia in what he considers the most authentic way possible: through the karas. And he has gone to painstaking efforts to do so, a process which was detailed in my investigation for Smithsonian.com a year ago.

By utilizing Armenia’s clay terracotta, Gharibian was also capitalizing on a more global trend in the wine community: the comeback of amphora-made wines. And in this pursuit he has been quite successful. Zorah’s first vintage was released in 2012, named “Karasì,” or “of the karas,” referencing the fact that the wine was aged in Armenian amphorae. Within months, it had made Bloomberg’s list of top ten wines.

But Gharibian started noticing some of the peculiarities associated with bringing Armenia’s cultural heritage into the modern market place in 2011, when he attempted to file a trademark with the IPA on the word “Karasì,” but was rejected.

“They [the IPA] rejected us because one, they said the word “Karasì” could confuse the consumer into thinking that the wines were aged in karas, and two, it was a common word,” explains Tomassian, “We went back to them saying that our wines were aged in karas and that is exactly why we were naming the wine ‘Karasì.’” Shortly afterwards, the IPA returned to them with a non-binding agreement.

Karases in Zorah Wines’ facility in Rind. (Photo: Hetq)

Six months later, when the “Karas” trademark was given to Karas Wines (“—no questions asked!”), the Gharibians reapplied for a different trademark in Oct. 2011. This time, it included the entire text on their bottle’s label: “Զ Karasì Zorah.” On March 12, 2012, this title was registered and authorized by the IPA.

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Confusion over the different manifestations of the word “karas” in Armenia’s tiny wine market has inevitably ensued. Speaking to Hetq.am last February, Del Aguila cited an instance in which she ordered Karas at a restaurant and was offered Zorah’s Karasi instead. She says that, even though the word “karas” is being used on Gharibian’s label as a way to designate the mode of production, she worries that the branding is too confusing.

Part of the confusion may stem from the fact that the two brands do not have an equal presence in Armenia’s local market. Being far more affordable (a bottle of Karas Wines’ Dry Red runs for around $8 or $9 USD), brand awareness of Karas is as a result much higher in Armenia. For Zorah Wines, creating karas-made wines has come at a price—and that price is over $30. The Gharibians admit their Karasí was never really intended for a local market. Curiously enough, a company which does not employ the use of karas in its production [Karas Wines] has more weight to the word locally—simply because people can afford it.

Del Aguila says that whatever the reason, consumers and sales people are simply not differentiating the two. In this, the negligence of supermarkets have not helped in the matter. She cited an example when several popular stores, SAS and Nor Zovq,  incorrectly lumped in Zorah’s products under the Karas label in their showrooms. Zorah’s wines “Voski,” and “Yeraz,” for example, both do not have the word “karas” on their label, but were labeled as “Karas Zorah Voski” and “Karas Zorah Yeraz.”

In 2017, Tierras de Armenia even hired a firm called Alpha Plus Consulting to measure the extent of the confusion. In a study conducted by the company, 28 percent of consumers thought both trademarks were owned by the same producer. And in sales, that number was even worse. Forty percent of sales people thought that the wines were owned by the same producer.

Del Aguila says she had initially hoped the two companies might settle the matter privately between them, but it wasn’t long before things got ugly. In May 2016, Karas Wines filed its first lawsuit against Zorah Wines for trademark infringement.

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It was a bitter battle, that unfolded publicly across local and international media. Until now, Gharibian maintains that “karas” is a word which belongs to all Armenian winemakers. He and Tomassian say that, even if they had been granted the trademark on the word, they would not prohibit other companies from using it (and in fact, another winery in Armenia has recently come out with a Karasí line of their own, a fact which Gharibian lauds), and they believe Karas Wines’ actions are an effort to “monopolize” a piece of Armenia’s shared cultural heritage.

Zorik Gharibian, owner of Zorah Wines, poses with a karas.

In a scathing open letter to Eurnekian, published last January, Gharibian wrote that creating such strict restrictions around the world posed a threat to Armenia’s future winemakers, who “will have to stand on international and domestic platforms and talk of Armenia’s 6,000 year winemaking history using words such as Amphorae, Qvevri or Thala and explain that our endemic word “karas” was sold to the highest bidder, a powerful corporation, for personal promotion and brand usage.”

Karas Wines recently won its second case against Zorah, delivered last February in Armenia’s Court of Appeals. But while the victory went to Karas, Del Aguila says her team has lost a lot in the process. Leading up to the verdict, Gharibian acquired a lot of grass roots support. His story is easy to get behind—especially given that Eurnekian’s team has claimed legal ownership over a word it has little practical relationship to.

Del Aguila complains that the press coverage, which tends to favor the “little guy” (in this case, Gharibian, whose production and overall entrepreneurial reach in Armenia pales in comparison to Eurnekian’s), has been slanted and unfair. “It was never in our agenda to monopolize,” she told the Weekly. “The core of this project is to create opportunities, Armenia has a lot to give and fortunately, a lot of new wineries have joined our path and are making great Armenian wines… And this is not only damaging our prestigious brand, but also the more than 500 families that are part of this amazing project.”

Juliana Del Aguila, director of Karas Wines’ operations (Photo: Hetq)

“Consumers should know exactly what products they are buying,” she told Hetq in a rare interview, “I believe Karasí Zorah is fantastic wine, but I also do not want it to be confused with Karas.”

Gharibian, on the other hand, says the debate will not end here. After the verdict was delivered in February, he told reporters that he plans to take the matter to Armenia’s Court of Cassation, and if all else fails, to international courts, where is convinced he would win. “I’m ready to finish this fight,” Gharibian told Hetq last December, “It’s a matter of principle for me.”

 

Editor’s Note 03/24/2018: The original version of this article stated that the decision to found Zorah Wines was made after the discovery of the Areni-1 cave in 2007, but the decision was made much earlier in 2000. The text has been adjusted to reflect this. 

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Karine Vann

Karine Vann has been assistant editor of the Weekly since the fall of 2017. Her writings focus primarily on the the politics of culture, media analyses, agribusiness, and global supply chains. She has received her Masters in Musicology at U. of Oxford and her writings on music have been published in Armenia’s Journal of Social Sciences. She is an outspoken opponent of throw-away consumer culture. If you have comments, questions, pitches, or leads, she can be reached at karine@armenianweekly.com.

8 Comments

  1. Thank you Ms Vann for an informative and balanced article about this controversy.
    In my view, both sides have merit; both sides have done tremendous good to the Armenian wine industry, to Armenia’s reputation as a wine –producing country and to Armenia in general. It reminds me of the dispute between Hovnanian and Cafesdjian, both individuals dedicated to helping Armenia. Sad.

  2. Just as a hunch, I went to the website of the Intellectual Property Agency of Armenia (www.aipa.am) to see if anyone has registered a trademark for the word “churn” and sure enough, “ԽՆՈՑԻԿ” is registered (Reg. No. 23576) and dairy products are included in the goods associated with the mark.

    If the Eurnekians are successful, it would create a precedent for the owner of “ԽՆՈՑԻԿ” to potentially prevent anyone from using this term on a label for butter made using a traditional Armenian butter churn. Probably not a fair result.

    I don’t think this is a sad situation. It is important for cases like this to happen in Armenia because it is an opportunity to show the international community that Armenian’s Intellectual Property laws are well developed, which encourages investment there, assuming that the outcomes are consistent and fair.

  3. “Consumers should know exactly what products they are buying” states the director of Karas Wines. Consumers buying a wine labeled Karas Wines are not buying a karas-produced wine! Worse, they are buying a product from a company that appears to want to obliterate karas-produced wines from Armenia by claiming ownership of the only word used to describe them. Consumers need to know this is what they are supporting when they purchase a product from Karas Wines.

  4. The effort from Eurnekian’s camp should go towards making sure the media, the supermarkets, and others at large understand the difference between their product and other products. In other words, instead of wasting money on lawyers, they can be spending money to educate the population and the market. That would be much more useful for everyone and less fratricidal. The focus should be on elevating ALL Armenian wines.

  5. Thanks for informing us about the differences between these two brands. I was at a wine & cheese shop in Yerevan, and asked for Karasi and was offered Karas Reserve for the same price. The sommellier didn’t think there is much difference between them (really?). There is also a restaurant chain in Yerevan with the name Karas, if Eurnikian doesn’t already own that chain, maybe he should sue them too?

  6. No comment on the case but rather on the flavors:
    As a wine drinker I must add that The latest blend of the
    2015 Karas Red is inferior to its original blend and this does not add to the reliability of the winery since both blends had the same vintage and nomenclature on the front of the bottle

  7. Just want to point out that ZORAH wines was started NOT when “news of the discovery of Areni-1 cave spread”. Rather, it began in 2000 long before the discovery of the Areni-1 cave which, incidentally, was in 2007. Also ZORAH did not “see an opportunity” in Karas winemaking after the discovery of the Arenì-1 cave. From the very start it intended to use the Karas in its wine-making process not because it intended to “capitalize on a more global trend in the wine community” but rather, because ZORAH believes that wine-making in the Armenian Karas are the most traditional, pure and authentic way to tell the millennial story of Armenian winemaking.

  8. Interesting read. Miss Vann is trying to deliver a fair and balanced report. But, I would argue that Karas wines position is so flawed at so many levels that it just doesn’t hold water. Let’s face it, in a country where unfortunately almost all is corrupt, including the juridical system, how can one give any weight to a survey carried out and paid for by the Eurnekian team? “I pay. You write what I say!” No brainer! Also if the issue is confusion between Zorah Karasi and Karas wines and the intention is not to have exclusivity of the word, then why is Karas wines taking to court other wineries? I would say that everyone is in agreement that this is a mess created by Armenia’s IP department. Why was Karas wines granted binding registration of the word “no questions asked” in the first place? And if this is all a mess created by the IP department and not the fault of either party then why are the courts so blatantly pro karas?
    Karas Wines would also do well not to use the families for which it provides work as bait and dangle them in front of consumers as some kind of accolade for its company. Are the families working in other wineries somehow less significant or important? Whether Karas wines likes it or not (and I don’t think many will argue ) the fact is that Zorah is probably the one single winery that has had the largest impact on showing the potential of Armenian wine on an international scale. It has been the pull which has brought enormous investments to the region which in turn equates to hundreds and hundreds of work opportunities!
    Nevertheless this situation is unfortunate and had Armenia’s government and juridical system played it fair it would have never arrived to this point!

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