Abandoned agave fields fill up with pests, and pests don't respect property lines. What happens in one field doesn't stay in that field. The same is true of companies. What happens inside one doesn't stay inside it.
That is the reality of an industry that shares a name. Tequila is an appellation of origin, much like Champagne. It is a name the law reserves exclusively for a product made in a specific region, from a specific raw material, under a defined process. It was the first appellation of origin ever granted in Mexico, in 1974. The legal holder of that name is the Mexican State. No company can buy it or inherit it.
To use the appellation, every producer needs an authorization from the Mexican Institute of Industrial Property (IMPI), the country's patent and trademark office. That authorization is not granted once and for all. It has to be kept in good standing through ongoing compliance with Mexico's official tequila standard, NOM-006-SCFI-2012. Compliance is verified by the Tequila Regulatory Council (CRT). The Council acts as certification body, inspection body, and laboratory. That work is what stands behind the word "tequila" on every label. Production oversight doesn't start at the bottle. It starts in the field, with the registration of agave plantations.
This creates a responsibility few industries share. Producers use a name that belongs to the Mexican State and whose credibility is built collectively. Outside Mexico, what one tequila company does is often read as something Mexico does. Someone picking up a bottle in Chicago or Houston doesn't always distinguish between the brand and the category. So when one brand comes under scrutiny, the effect can reach the entire category.
The tequila industry is strong. It has a demanding standard, a council that verifies compliance, and a National Chamber of the Tequila Industry (CNIT) that represents it. That strength was built over decades and is sustained every day. Within each company, good governance is one concrete way to contribute to that strength. The term can sound abstract, but in a tequila company it translates into very concrete decisions. Many houses already make them, even if they don't always call it that.
It comes down to knowing who decides what, and making sure every important decision is put in writing. A decision that lives only in the memory of the person who made it is hard to explain years later, when that person is no longer there or when the company has to answer to a third party. It also means having written contracts with agave growers. Agave takes years to mature, and a relationship that long deserves clear rules for both sides. Without them, continuity of supply rests on memory or on a handshake. It includes verifying and documenting the origin of the agave that enters the distillery. If the industry's controls start in the field, so do each company's. It means naming clear owners for compliance with the standard. When compliance is everyone's job, in practice it is no one's. And it requires agreeing in writing on how disagreements between partners, or between generations, will be resolved. Those rules are best agreed on in calm times, before there is anything to resolve. With all of that in place, a company can respond to scrutiny with documents rather than recollections. If someone asks where the agave came from, who approved a change, or how a batch was verified, the best answer is a paper trail that was already there.
Good governance protects the company first. It gives the company continuity, reduces its dependence on any one person, and lets it grow without losing clarity. At the same time, it protects something the company doesn't own. Every company that complies, and can prove it, upholds the credibility of the name they all share. The strength of the category doesn't depend only on the standard and on those who verify it. It also depends on every authorized producer being able to keep its authorization in good standing day after day, and to prove it when asked.
It's a bit like raising a child. For years, you can handle the day-to-day and still get results. But if the foundations weren't built consistently along the way, there comes a point when the child is an adult and still lacks the tools to stand on their own. A company is much the same. It can produce well for a while and still not have built the foundations it needs to carry on from one generation to the next. Those foundations aren't this year's volume or margin. They are clear rules, records, defined responsibilities, and the ability to account for what was done. In a regulated industry with a shared name, missing those foundations doesn't only hurt the company. It also weakens the category.
The appellation of origin is protected in the field, in the distillery, and in the lab. It is also protected at the table where decisions are made, in the files, and in the contracts. This logic isn't unique to tequila. Every company that operates under a concession, a permit, or a license is using something someone else entrusted to it. And in a family business, the family name travels with every decision.
These are questions that companies working with shared names, permits, or concessions have been living with for a long time. They don't come from any particular case, and they aren't aimed at anyone. They are meant as a reminder that internal governance is a concrete way to protect what has already been built, and to keep contributing to it.
I have spent nearly twenty years working with companies, many of them family-owned and in regulated industries. When things are going well, good governance is almost invisible. You notice it the day someone asks a hard question and the answer is already in writing. In tequila, that question is never about just one company. That is why I believe keeping your own house in order is one of the most concrete ways to care for a name that belongs to Mexico and that every tequila producer holds in trust.
Francisco Parra is an attorney and the founder of Parra Advisory, a firm specializing in corporate law and corporate governance in Mexico and Latin America. He holds an LL.M. from Duke University School of Law and is a certified Técnico Tequilero (Tequila Technician) from the Universidad Autónoma de Guadalajara. He previously served as Legal and Compliance Director at Grupo Bimbo and as General Counsel of Clase Azul México. He is the author of the book Tequila: Culture, Law & Business.
