Following complaints by French wine producers, the village has been ordered to cease labelling its wine - which is white but non-bubbly - as "wine from Champagne." The French fraud squad seized 3,000 bottles of the Swiss champagne, actually a kind of Pinot, from French supermarkets over the Christmas period.
The affair threatens to become a source of friction between Switzerland and the European Union, which has taken France's side in the case.
Villagers point out that their commune has been called Champagne for 1,143 years. Besides, they say, they are not trying to pass off their wine as "champagne". The bottles, which do not resemble champagne bottles, are labelled wine from the "commune vaudoise de Champagne" or "wine from the vaudoise bank of lake Neuchatel, Champagne appellation d'origine".
The French producers, backed by Paris and Brussels, argue that this is a deliberate attempt to cash in on the celebrity of the champagne name. The mayor of Champagne, Albert Banderet, says this is bullying and unfair.
"We have no problem with making it as clear as possible that our produce is Swiss but we will not give up the right to use the name of our commune, which goes back to the year 855."
After a long wrangle, a deal was reached in 1991 between France and Switzerland, allowing the local biscuit-makers to use the word. But champagne producers have fought battles all around the world to protect the sanctity of the brand-name of their wine.
Swiss officials were forced to concede the point last year during tricky negotiations in Brussels on a range of EU-Swiss farm trade issues. A draft agreement, still not formally ratified by Switzerland, recognises the sole right of the French region to market wine called champagne or to use the word champagne as an "appellation d'origine".
The deal is being disputed by Swiss politicians. A local MP, Martial Girod, asked: "Must we one day abolish the name of one of our villages just to help negotiations between Switzerland and the EU?"Reuse content