Marketing Products identified by their origin (or Geographical Indications) A tool for rural development

1. What is a GI ? A GI or geographical indication: is a Geographical or traditional name or sign (reference to) used on certain products which corresponds to a specific geographical location or origin (eg. a town, region, or country). The use of a GI may act as a certification that the product possesses certain qualities, or enjoys a certain reputation, due to its geographical origin. GIs are usually the result of many years of development of a product by producers and artisans in a given region, development which give to the product a certain reputation !

Art 22.1 of the TRIPS agreement : Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.

3.Justification for special protection of GIs ? Because GIs reflect a know-how built up over years, by generations of artisans (They are a collective Intelectual property) - A regional heritage Because they represent traditional values, Because they often fullfill external benefits (maintain landscapes, or biodiversity, maintain a healthy regional economy)

To protect against cheaper industrial imitations (that do not guarantee the same internal qualities or external benefits) Protection of consumers against misuse of Gis To protect against « delocalisation » and the « robbery » of the IP

Important dimensions of PDOs and PGIs -Origin -Link to the terroir and tradition -production method that respects the product - It is a collective right !

EXAMPLE : The Gruyère Cheese Origine «Gruyères» village

Production methods that respect the product

They are really Territorialised collective heritage. PDOs and PGIs give the rights to the supply chain to have exclusive rights on this heritage.

Link to the Terroir and to tradition

On Marketing : The creation of Value for the consumer involves : A number of physical functions: Production Processing Transport … But value is increasingly created by non-physical attributes : Image Security – assurance … Which depend on other functions: Management Coordination Quality control Marketing …

The hypothesis of differentiation - Generic : batches may be mixed because they are perceived as perfectly equivalent. - Differentiated : products provide buyers/consumers with a specific « unique selling proposition » (USP)

Generic vs differentiated

A Geographical Indication is differentiated !

A Geographical Indication is a common asset for all producers of the area All actors of a PDO supply chain “share” the reputation of the name (a common asset !). They must therefore coordinate to assure common quality production, in which each partner is rewarded for the quality (added-value) he contributes. PDO products are often produced by many smaller, artisan based enterprises, but they compete with larger industrial models – that integrate many (or all) of the functions.

For an alliance to work, they need : An internal governance structure to assure that all members feel represented and that decisions are reached efficiently A code of practice to define the product (a certain latitude is necessary, to let each artisan contribute his personal touch and assure the product does not become uniform) A quality assurance system, to assure: no free riders and that different chain actors may trust the work of the others and that the final product fulfils the “common” promise to the consumer Common high quality marketing efforts to communicate these specific qualities and assure the product is recognised by the consumer as carrying immaterial values 2. The specificities of the PDO supply chain – the alliance