MEXICO CITY - Alfredo, an Argentine in his 30s who lives in Madrid, swears he will never drink tequila again. His Mexican friends tell him that what he had was not the real tequila, their homeland's national drink. Still, he insists, with the look of someone who has stared the devil straight in the eyes, that the label clearly said that he was drinking tequila.

Alfredo is not alone. There are many people who feel queasy just hearing people talk about the Mexican liquor. Tequila evokes images of armed machismos drinking from the bottle and firing guns in the air, or American students losing all of their inhibitions thanks to a few brief but lethal shots.

Today makers of this liquor from the juice of the agave plant are trying to open up the world markets to their product, and position tequila as a premium alcoholic beverage, much like cognac, vodka and whisky. But there is a problem.

According to a national survey on the consumption of distilled alcohol in Mexico, the nation drinks around 30 million cases of the stuff annually. However, the distilled alcohol industry reports having sold only 16 million cases in the same time period. That means that 40 to 45% of the distilled alcoholic beverages sold in Mexico have some kind of irregularity.

According to Cristobal Mariscal, vice president of the National Chamber of the Tequila Industry, the producers are faced with “problems of unfair competition from the so-called tequilados or agave liquors that trick the consumer by evoking tequila.”

In spite of those problems, the numbers are solid. In 2011, 284 million liters of tequila were sold in total. The export market continues to rise, with 131.5 million liters of tequila exported, representing a total value of around $665 million.

Raw materials

Tequila is produced from the Tequilana Weber Blue variety of Agave, a cactus that is similar to aloe. The roots of the agave are sliced, baked and then the juice is extracted. The juice is then distilled and mixed with water for a final alcohol content between 32 and 38 proof.

The resulting drink is known as mescal, and has different names and properties depending on the region where it is produced. The most famous mescal comes from the town of Tequila, in the state of Jalisco. Other famous types of mescal are sotol, mezcal and bacanora, a unique variety that was illegal for 77 years between 1915 and 1992.

According to market research done by Euromonitor, the global sales of tequila grew 2 percent in 2011. Although it is not even close to the meteoric rise of vodka on the global market or the whisky boom in India, tequila is making solid progress towards the premium sector.

In 2008 the United States bought 46 percent of the global production, more even than Mexico, which consumed 40 percent of the world’s tequila. The rest of the market, though, is very fragmented.

According to Euromonitor, the industry’s main strategy has been to appeal to the feminine market and try to position tequila as a luxury product, far from the idea of a powerful drink to get drunk on quickly. Pernod Ricard, owner of the tequila brand Olmeca, has decided to make Russia one of his principal markets and sends 20% of its inventory there.

Producers of mezcal and bacanora have adopted similar strategies, according to Pavel Dennis, president of the Regulatory Council of Bacanora. However, industry estimates indicate that in order to conquer the BRIC market, the industry would have to double the amount of agave grown (around 80,000 hectares). That’s not easy in a country with as little water as Mexico.

Real Tequila

There are 818 recognized brands of tequila in Mexico, and in the rest of the world you can find another 143 brands. Bottles are labeled so that customers can verify that it is authentic tequila and not alcohol made from sugar cane and then mixed with artificial flavors and colorants. For true tequila, the label should indicate the type of tequila (white, rested or aged), and should say that the tequila is 100 percent agave, and should have the letters CRT-NOM, for the Tequila Regulation Council and the Official Mexican Standard, which regulate tequila production.

The NOM designation is required of all 100 percent agave tequilas, and indicates that the government’s standards have been met, but it does not guarantee quality. That is because there are two types of tequila allowed under NOM rules - the 100 percent agave kind, and “mixtos,” which must contain at least 51 percent agave sugars, but up to 49 percent of the alcohol can come from distillation of different sugars.

Mariscal, from the National Chamber of the Tequila Industry, clarifies that the distillation process is always started with the agave, regardless of whether the product is a “mixto” or pure agave tequila.

For some specialists in hard liquor, the fact that the Mexican government even allows the “mixto” category is in and of itself a way of ripping off the consumer, who is expecting a pure product and not something that is barely different from alcohol made from sugar.

Not only is the “mixto” cheaper, it can also have effects like those that scared off Alfredo. In contrast, the long-time drinkers in Matatlan, Oaxaca insist that drinking tequila or mescal not only doesn’t give you a hangover, but can also give you a “mystical” experience.