“[Geographical Indication] allows European producers to earn a premium for the quality of their produce”

The genuine article

The business and controversy of Geographical Indication

Text by Justin McCurry

Would you offer your dinner guests some pungent cheese, a couple slices of dry-cured meat and a postprandial glass of blended brandy? Or, more likely, would you rather forego those prosaic descriptions and tantalise their tastebuds with the more appealing Roquefort, Parma ham and Armagnac?

As far as Europe’s most valued foodstuffs and beverages are concerned, location is everything.

The European Union has protected as many as 4,000 items with Geographical Indication (GI) status. Now, with the trading bloc on the cusp of finalising an economic partnership agreement (EPA) with Japan, the protection of signature products has become a key issue in trade negotiations.

GI status is granted to products that have a specific geographical origin, and whose characteristics and reputation among consumers is inextricably linked to that locale. Think Champagne, Camembert de Normandie, the aforementioned Parma ham (or, more accurately, Prosciutto di Parma) and Roquefort cheese. Location is the thread running through a GI product — from the origin of its ingredients to processing and packaging.

This special status lets consumers know that what they are buying is authentic and, as the European Commission puts it, “allows European producers to earn a premium for the quality of their produce.”

That consumer base will expand to include Japan once the EPA, as many expect, is agreed later this year before going into effect in 2019.

As part of the agreement, the EU has asked Japan to recognise around 200 European GIs to ensure that only products with this status can be sold in Japan under the same name. Doing so will ensure that Japan’s famously discerning consumers can be sure they are buying the genuine article.

While GI fails to make headlines in the same way as trade barriers, there is no doubting its role in driving the rural economies of countries such as France and Italy.

Simply put, GI is a huge business in the EU, allowing producers to command big premiums on cherished produce. Consumption of GI products totalled €48 billion in 2014, according to the EU Intellectual Property Office. In a 2010 report, the office found that GI production accounted for almost 6% of the total food and drink industry in the trading bloc. Almost every one of the EU’s 28 member states has GI-protected produce.

In terms of consumption, France accounts for the largest share of GI-designated food and drink, followed by Germany and Italy with 16.2% each. By category, wine accounts for just over half of all GI designations, followed by spirits, cheeses, meat products and beer.

While the technicalities surrounding GI designation are many and complex, they have become central to the long-awaited EPA, with the potential to triple exports of European processed food exports to Japan.

The trade section at the EU Delegation of the European Union in Tokyo said Japan was waking up to the benefits that can come from GI status. In 2015, Japan introduced its own GI system, and now protects several dozen products — from Yubari melons to Tajima-gyu beef.

“GIs have the potential to add value to agricultural products and beverages,” the EU trade office told Eurobiz Japan. “They can help keep rural areas alive because you can’t move a GI from its place of origin.”

The trade office cited EU studies showing that GIs are good for generating local jobs, and that listed products — particularly cheese — can fetch prices up to four times higher than those of their conventional counterparts.

“Once there is a high price for GI cheese, it trickles down the chain all the way to the dairy producers, because they own the cows that are producing milk for that cheese,” the trade office added. “I think that’s one of the positive sides of the system.”

The EBC Liquor Committee also welcomed the inclusion of GIs in the EU–Japan EPA. In e-mails to Eurobiz Japan, the committee expressed its support for tighter regulations on GIs, saying that would be a “very positive move for Japanese consumers as well.”

While the EU is an established GI enthusiast, opposition remains strong in countries such as the US, Australia and New Zealand.

The agreement to include GIs in the EU–Japan EPA prompted a recent outburst from US groups representing farmers and food manufacturers.

In early October, the US Dairy Export Council and the Consortium for Common Food Names wrote to President Donald Trump urging his administration to impress on Japan that any GIs it is considering for approval with the EU should not include “common” names such as parmesan and bologna.

The groups, which have made similar demands of Mexico, accused the EU of attempting to monopolise those and other terms.

Under the EPA, the EU will be able to insist that Japan does not market items from third countries that are included in the list of GI products. The reciprocal arrangement means Japan can make similar demands of EU countries.

Faced with export restrictions on, for example, Kraft Parmesan cheese — a familiar product among Japanese consumers — and other such products, food producers in the US have called, rather belatedly, for the GI designations to be dropped from the EPA. If that does not happen Kraft, whose popular grated parmesan is sold in Japan by Morinaga Milk Industry, could be forced to change the cheese’s name, according to media reports.

“The way the Americans see it is that the EU, through the GI protection in third countries, is attempting to limit market access for others,” the EU trade office said. “But this is not the case. The US can produce whatever they want and export to wherever they want, but once our EPA is in force they shouldn’t continue using the European GI names, protected by Japan under the agreement.”

While the EU trade office praised Japan for making swift progress on GI during trade negotiations, it believes Tokyo should tighten up its regulations to protect the misappropriation of Japanese GI names in countries such as China.

One reported point of contention is that Japan’s legislation leaves open the possibility that certain GI names could one day be accepted as generic — a loophole apparently designed to accommodate US exporters.

“Our EU GI names will be protected in Japan [under the EPA],” the EU trade office said. “What Japan does with its legislation is up to Japan. But at the same time, we would want to encourage Japan to fully promote and support the GIs, without getting too entangled with US ideas.” 

“[GIs] can help keep rural areas alive”