Every Appellation d'Origine Contrôlée (AOC) is produced according to rules codified by the INAO. Because its primary purpose is to regulate the use of noteworthy names, one of its primary tasks is to delimit the geographic area entitled to produce a product. For wine this means vineyards, but the INAO also regulates the place of processing and or aging.
The INAO, like many organizations charged with regulating and helping producers, often is put in a contradictory position. An individual farmer may want his or her farm to be included in the limited area, but that might have the effect of diluting the average quality of the area. Rarely is this without controversy, and it is a delicate balancing act.
Government control of agricultural products began with the law of August 1 1905, granting the government authority to define the official boundaries for the production of certain agricultural products. At first, the appellations were not designed as measures of quality of the produce and failed to resolve the problem of over-production of wine, a problem that continues to this day.
A second law, passed on May 6 1919, gave the courts power to act in cases where the regulations were not being followed. This once again was an initial failure, as the resulting prosecutions proved to be long and fraught with difficulty.
In a further attempt to address problems in the wine industry, the INAO was created by a decree of July 30 1935 to cover all administrative, judiciary and professional aspects of appellation control. Initially, INAO was a Comité rather than an Institut. The first AOC laws were passed in 1936, and most of the classical wines from Bordeaux, Burgundy, Champagne and Rhône had their inital set of AOC regulations before the end of 1937.
In 1990, the economic success of the appellations led parliament in a law of July 2 to extend the powers of the INAO to cover all agricultural produce.
Since January 1, 2007, the Institute is renamed Institut National de l'Origine et de la Qualité and also guarantees organic and Label Rouge certifications. In spite of the name change it retains the abbreviation INAO.