Why are there more GIs in Southern Europe?

Geographical Indications (GIs) can be seen as a way of giving consumers more information about the provenance of niche food products, but they can also be seen as protectionist instruments. The EU has the most GIs in the world (makes the Americans suspicious) but they are concentrated in the south of the EU.

In the Journal of Agricultural Economics Martijn Hysmans and Johan Swinnen explore this phenomenon. They set out a series of hypotheses for further testing, although some already look more likely runners than others.

Historically, GIs were first developed in the EU wine sector. 89 per cent of wine GI are to be found in the south of Europe, but southern member states also account for 70 per cent of food GIs (excluding wine).

H1 relates to better and more differentiated food in the south, but there is little evidence to support this (and see the discussion of Scotland below). There may be some evidence for H2 that more GIs are to be found in regions with low productivity, leading to protectionist lobbying. H3 is that globalisation may have an effect, although I would word it rather differently in terms of resistance to globalisation by informed consumers leading to a search for authentic local products.

H4 is that the decline of traditional protectionist instruments may lead to their substitution for new instruments. But why particularly GIs?

I found H5 and H6 on spillover effects persuasive. Economic spillover relates to the use of the knowledge and capabilities derived from the development of wine GIs. H6 relates to the political capacity to design successful lobbying strategies.

No Terroir in the Cold? But what about Scotland?

A farm on Sanday in Orkney which, as the name implies, has particularly good topsoils.

Scotland is one of the more northerly places in the EU, particularly in the Highlands and Islands. There are currently 15 GIs in Scotland. Four are cheeses and three are fish products and, of course, Scotch whisky is there. Four are from the northern isles of Orkney and Shetland, three from Orkney. Orkney has a very well organised farming community with its own farming magazine (Orkney Farmer) and was a pioneer in relation to action on the cattle disease, BDV.

One of the products from Orkney that has a GI is cheddar cheese ('Orkney Scottish Island Cheddar') which might often be regarded as a commodity product. However, the cheese has its own special method of production: Our tradition

There has been concern that Brexit might threaten the system of GIs seen as key to the success of traditional food and drink products in Scotland: Scottish Parliament. In particular, there has been concern that a future trade deal with the US might threaten GIs.

Geographical indications become a Brexit issue

The basic idea behind geographical indications (GIs) is to prevent a domestic producer giving a name to their own product that gives the impression to consumers that it comes from the protected region covered by the GI, e.g., Parma ham. It is seen as a means of preventing the public from being misled by producers jumping on the bandwagon of a successful GI and also to prevent unfair competition.

The EU has been favourably disposed to GIs because it sees them as a means of encouraging high quality, value added food production in the EU which will increase returns to farmers. This has led to some conflicts with producers elsewhere in the world, e.g., with the United States over Parmesan cheese.

The EU has over 3,300 protected food and drink products which have a specific geographic origin. Sales of protected labels account for some six per cent of the EU's food and drink sector. The products are sold on average at a price more than two times higher than similar non GI products.

In the Brexit report from the Yorkshire Agricultural Society we did consider GIs, but in terms of continuing protection for British products such as Orkney cheddar cheese and Cornish pasties.

However, in one of its latest position papers the EU is demanding that Britain should legislate to recognise products such as Champagne, Parmesan and Beaufort cheese after Brexit. Such protection should be comparable with that provided by Union law: Position paper

Protecting niche products after Brexit

Will Orkney cheddar cheese still enjoy protection after Brexit? Geographical indications as they are called are on the agenda again, so I thought it might be helpful to reproduce below what I wrote for our Yorkshire Agricultural Society report with the concluding paragraphs drafted by an agricultural trade lawyer.

Seventy-six names in the UK, including food products, wine, beers and ciders, are registered under the EU’s geographical protection schemes. There are three main programmes: protected designation of origin (PDO), protected geographical indication (PGI) and traditional speciality guaranteed (TSG).

Government sources told The Times that securing a “rollover of current arrangements” was the best option. Officials are also looking to see if speciality recipes or regional provenance can be protected using trademark regulations under domestic intellectual property rights laws. Matthew O’Callaghan, of the Melton Mowbray Pork Pie Association, called for a swift resolution. “It would be very damaging to leave these schemes,” he said. “There are some products that are exported, it would be damaging for them within the EU. More important for us is the issue of copying within the UK. It is the EU that has saved a lot of British food heritage."

[From our repoort] The basic idea behind geographical indications (GIs) is to prevent a domestic producer giving a name to their own product that gives the impression to consumers that it comes from the protected region covered by the GI, e.g., Parma ham. It is seen as a means of preventing the public from being misled by producers jumping on the bandwagon of a successful GI and also to prevent unfair competition.

The EU has been favourably disposed to GIs because it sees it as a means of encouraging high quality, value added food production in the EU which will increase returns to farmers. This has led to some conflicts with producers elsewhere in the world, e.g., with the United States over parmesan cheese. Given the EU’s support for GIs, it is likely that they would insist on the UK recognising EU GIs in any future trade agreement. This could well become a contentious issue in any trade negotiations between the EU and UK after Brexit.

What value GIs offer to British farmers is an interesting question. Niche products, e.g., Orkney Island cheddar, are often involved, although these may be important to local economies. In Yorkshire in particular, the following products are covered by GIs: Swaledale cheese; Swaledale ewes cheese; Yorkshire Wensleydale.

GIs are established by EU regulations and there is no UK legislation needed. GI protection in the UK would lapse on Brexit and EU protection of UK GIs could be expected to lapse as well. The UK would probably have to offer some minimum standard of protection to European GIs. Indeed, under WTO rules, the UK would be under an obligation to implement some form of legal protection. In an earlier TRIPS case India-Patent Protection for Pharmaceutical and Chemical Products WT/SDS79/R (albeit one on patents and not on GIs as such), the Appellate Body went out of its way to say that the need to offer protection was a positive obligation on the part of the WTO member.

If Brexit does occur, our view is that it is likely that the WTO rules in TRIPS require the UK to offer a minimum standard of protection for products protected by EU GIs, although the form and level of that protection remains unclear. These are complex matters as is evident from the example below.

It is possible that the WTO rules may have made the position clearer – and also better for UK farmers On our understanding, the Dispute Settlement Panel in EC — Trademarks and Geographical Indications (WT/DS174/R) upheld the principle that foreign nationals should have proper access to the EC’s GI system (https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds174_e.htm), with the EC subsequently amending the system so as to comply with the WTO decision: see Council Regulation (EC) No 509/2006 of 20 March 2006 on agricultural products and foodstuffs as traditional specialities guaranteed and Council Regulation (EC) No 510/2006 of 20 March 2006 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs.

Significantly, the latter expressly recited that ‘[t]he protection afforded by this Regulation, subject to registration, should be open to the geographical indications of third countries where these are protected in their country of origin’. (For the current legislation, see Regulation (EU) No 1151/2012 of the European Parliament and of the Council of 21 November 2012 on quality schemes for agricultural products and foodstuffs.) Accordingly, it would seem that UK farmers post-Brexit might legitimately expect to be able to continue to take advantage of this form of ‘quality marketing’ within the EU.