*Update: On Sunday, October 6, 2024, Grover Sanschagrin shared that they would be removing all brands from the Additive Free Alliance website and the Tequila Interchange app after action by the CRT. Listen to his full statement here.
In January, ElVelo Tequila received some disheartening news. The labels their bottles had carried for years—as they had worked to establish themselves in the competitive U.S. market—were suddenly deemed unacceptable by Mexico’s tequila regulators, the Consejo Regulador de Tequila (CRT).
“We had always put on the back label ‘No Additives.’ However, the CRT flagged it and said we had six months to destroy labels and then print new labels,” says Leanne Favre, the brand manager at Altamar Brands, the distiller and importer of ElVelo. She couldn’t offer an exact dollar total lost by ElVelo, but called it a “not an inconsequential amount.”
Don’t miss the latest drinks industry news and insights. Sign up for our award-winning newsletters and get insider intel, resources, and trends delivered to your inbox every week.
ElVelo is just one of the independent brands that have been swept up in the conflict over additive-free messaging in the tequila industry. This now-yearslong ruckus centers on what can and cannot rightfully be labeled additive free and by whom, and whether these now-contested words can appear on bottles. But as the dispute over the right to certify continues, independent producers are left with the often costly task of navigating the chaos.
The conflict came to a head on March 27, when Mexican authorities raided the Jalisco home of Grover and Scarlet Sanschagrin, the founders of Tequila Matchmaker, an organization advocating for greater transparency within the industry, and the Additive Free Alliance, which has been tracking and testing tequilas for their use of additives since 2020—work which put them at odds with the CRT. Indeed, the criminal complaint that spurred the raid came from the CRT, alleging the Sanschagrins property was housing a factory producing adulterated alcoholic beverages. Tequila insiders speculated about the motives behind the CRT’s allegations.
As the dust settles after the raid, and producers await the rollout of a CRT-sanctioned additive-free program, SevenFifty Daily reached out to brands and producers to find out what’s behind the conflict and how they’ve been impacted.
The Issue With Additives in Tequila
Additives first began to appear in tequila as early as the 1860s to cover up bad agave and fungal blight. These days they include jarabe (sugar-based syrups that can add flavors of vanilla and tutti frutti), caramel coloring, oak extract, and glycerin. “They’re considered legal and very normal,” says Scarlet Sanschagrin. The Sanschagrins estimate that at least 70 percent of tequilas on the market contain additives, but perhaps as high as 85 percent.
“Some mass-produced brands use additives because they’re harvesting agave prematurely using diffusers that strip agave of all its natural qualities,” says Adam Millman, the cofounder and CEO of De Nada Tequila, an independently owned producer of additive-free tequila. “You are left with a flavorless distillate liquid that is then filled with additives in an attempt to restore flavor and as a way to make mass-volume tequila at a higher margin.”
While they have no reported health risks, additives can confuse neophyte consumers as to what tequila is supposed to taste like—notably cooked agave—instead rendering spirits vanilla-laden, sickly sweet, and with an overly syrupy mouthfeel. But more pertinently, brands are under no legal obligation to disclose the use of additives to the consumer.
The Norma Oficial Mexicana (NOM), the compulsory standards and regulations for Mexican products enforced by the CRT, allows for one percent of the weight of the liquid to be additives—referred to in the NOM as abocantes. The Sanschagrins have gotten their hands on a non-public document that lists what abocantes are allowed—it’s 67 pages long. Brands who use these permitted abocantes can still claim to be additive free.
That’s why the Sanschagrins started doing their own lab testing. There isn’t one definitive test to detect all additives, so “you have to know what you’re looking for,” says Grover Sanschagrin. They mainly use liquid chromatography, testing for 19 common additives, including intense artificial sweeteners like acesulfame K, aspartame, stevia, and saccharine.
Many independent distillers—and some of the most pursued by the cognoscenti—joined the program and had been using its Additive Free seals on their bottles, taking great pride in going above and beyond the minimal legal standards for transparency. “We believe that people should have a right to see how the products they purchase are made and what goes into them,” says William Erickson, the U.S. sales and marketing manager for Fortaleza.
The Sanschagrins’ program was building in momentum. There were 42 distilleries and 111 brands approved by the Additive Free Alliance encompassing nearly 400 different tequilas. Well over 100 different retail partners had joined as well, clearly seeing the value in selling additive-free tequilas to their customers. “It’s definitely a term that’s penetrated beyond knowledgeable drinkers,” says Noah Arenstein, the resident mezcal expert for The Cabinet in New York’s East Village. “My signal of this was when I started seeing ‘additive free’ signs on tequilas at Total Wine in the Florida panhandle.”
A Dispute Over the Power to Certify
There is, however, a lot at stake: As of 2023, tequila and mezcal were worth $6.5 billion according to the Distilled Spirits Council of the United States, an increase of 7.9 percent from 2022. Mike Dolan, the CEO and cofounder of Mijenta, notes that Nielsen data for the tequila category shows additive-free brands growing in some cases at 20 times the rate of brands that use additives.
“Many of the big legacy and celebrity-backed brands that use additives are both cutting prices and losing market share,” says Dolan. “What this says to me is that consumers have reached a level of sophistication with tequila where they’re seeking out high-quality, additive-free brands and are finding them through a variety of tools at their disposal.”
Erickson seconds this. “Right now we’re starting to see a slowdown in the sales of higher-end brands and this has coincided with the additive-free movement,” he says. “Some companies are really afraid of what [more regulated additive-free labeling] is going to do to their sales.”
As the additive-free movement gained traction with the public, the CRT became more vocal about its opposition to the Additive Free Alliance. In March 2023, the CRT announced an additive-free certification mark of its own, and then in October, Patrón Tequila unveiled its new additive-free seal endorsed by the CRT. Almost immediately, the CRT backpedaled after “backlash from the big producers,” says Grover Sanschagrin.
In January 2024, the CRT followed up with a statement denouncing the work of the Additive Free Alliance, and stipulating that until their own additive-free program was up and running and its “technical criteria” approved, no tequila brands could use the term “additive free” on any label. Some in the tequila industry say this move was in deference to the big distilleries, who are not served by the growth of the additive-free movement. “These brands have their own consumer base, but it’s not okay for them to go after the smaller tequila community, specifically the smaller producers that are focusing on quality tequila,” says Millman. “And this is what we’re seeing today.”
A Burden on Small Brands
With additive-free language banned from labels, it becomes harder for artisan brands to differentiate their tequilas from the major producers at retail, or simply inform consumers about what goes into their products.
“These new regulations make it more difficult for smaller, additive-free brands to clearly share their ethos and production choices,” says Favre. “These laws clearly benefit big brands who are not required to disclose their shortcuts in production.”
In some cases, it also costs brands time and money. “Due to a reversal in policy at the CRT, Mijenta was no longer permitted to use the previously approved labels disclosing that our tequila is additive-free and promoting our status as B Corp certified and carbon neutral,” explains Dolan. The company was given the choice to destroy existing stock and reprint all their labels, or sticker over the language no longer allowed until existing stock was depleted; though time-consuming, they chose the latter option for sustainability purposes.
“The delay in official labeling does present challenges, particularly for smaller, independent brands that take pride in crafting authentic, clean tequila,” says Eduardo “Lalo” González, the founder of Lalo Tequila. He welcomes the arrival of an official label when it comes, but for him, it’s not the be-all and end-all. He feels that his lack of marketing budget forces his tequila to rely on a great word-of-mouth reputation.
As Dolan says: “It will ultimately be consumers who decide whether any certification program is credible, and if it’s not, they’ll continue to seek that information elsewhere.”
The Current State of Additive-Free Certification
Upset by the CRT’s flip-flopping, representatives at Patrón—which despite its widespread popularity and reach as part of the Bacardi Limited portfolio, was previously listed as additive free by the Alliance—said they have sued the CRT. (The CRT was also contacted for this story but declined to comment—as did many producers, some expressing fear of repercussions.)
“While we await industry-wide standards, we’ve placed the additive-free seal endorsed by the CRT on hold for Patrón bottles,” says Mauricio Vergara, the president and chief operating officer of Patrón. “We believe that an open dialogue about the use of additives, coupled with clear standards and product labeling, will benefit the entire industry as a whole. Our goal is to provide transparency for consumers, and we’re confident that with collaboration with the industry, we’ll get there.”
In June, came the promising news that Certificadora Royalty, a program around since 2019, has been accredited by Mexico’s Sociedad Internacional de Acreditación to inspect and certify tequilas. They are currently hiring staff and Grover Sanschagrin thinks they will likely be approved by the Mexican Ministry of Economy next—a move which would effectively end the CRT’s monopoly on regulation and the stalemate over labeling.
In August, the Sanschagrins—now living back in the U.S. as their lawyers instructed it “wasn’t safe” to stay at their home in Mexico—reimagined their program as an independent nonprofit expanded to encompass all agave spirits, with a new verification process that no longer necessitates distillery visits to Mexico; any brands and companies that join, agree to allow their products to be purchased at U.S. retail and undergo independent liquid chromatography lab analysis.
As for the de jure additive-free brands—and the consumers who enjoy them—for the time being all they can do is wait for a new additive-free certification process to emerge. “The progress of the CRT in this area may make it harder for smaller brands to differentiate themselves from other brands on the market,” says González, “but it also motivates us to continue educating consumers and maintaining the highest standards in our production process.”
Dispatch
Sign up for our award-winning newsletter
Don’t miss the latest drinks industry news and insights—delivered to your inbox every week.
Aaron Goldfarb lives in Brooklyn and is the author of How to Fail: The Self-Hurt Guide, The Guide for a Single Man, and The Guide for a Single Woman. His writing on beer has appeared in Esquire, Playboy, The Daily Beast, PUNCH, First We Feast, Serious Eats, Draft Magazine, among others.
